Newspaper article International New York Times

21st Century Fox Adds to Cash Pile ; Pursuit of Time Warner Could Heat Up after Sale of Pay-TV Units to BSkyB

Newspaper article International New York Times

21st Century Fox Adds to Cash Pile ; Pursuit of Time Warner Could Heat Up after Sale of Pay-TV Units to BSkyB

Article excerpt

The deal could provide Rupert Murdoch's 21st Century Fox with additional firepower for its pursuit of Time Warner.

The media giant 21st Century Fox may soon be stepping up its effort to take over Time Warner.

On Friday, 21st Century Fox said it was selling its Italian and German pay-television assets to British Sky Broadcasting Group for more than $9 billion, the latest sign of consolidation in Europe's media industry.

The deal with BSkyB, the British satellite broadcaster that is 39 percent owned by Rupert Murdoch's 21st Century Fox, comes shortly after Time Warner rejected his $80 billion takeover approach.

The sale of 21st Century Fox's European assets could provide the company with additional financial firepower to make a new offer for Time Warner, something that many analysts expect.

For BSkyB, one of Europe's largest pay-television providers, the deal allows it to expand its reach in the region. If approved, the purchases of the Italian and German assets would let the broadcaster offer premium sports and movie services to roughly 20 million customers from Ireland to Italy.

"We believe that the three Sky businesses will undoubtedly be stronger together," BSkyB's chief executive, Jeremy Darroch, told investors on Friday. "The enlarged Sky will be good news for customers and investors alike."

The deal must still receive approval from regulators and BSkyB's minority shareholders, and antitrust officials are likely to scrutinize how the takeovers would affect customer choice.

The plan appeared to be met with skepticism by some investors, with BSkyB's shares falling 5 percent in afternoon trading in London.

Some analysts questioned whether BSkyB would be able to achieve the planned cost savings, estimated to be in the hundreds of millions of dollars, from combining the three units, and worried that the company's core British business was showing signs of reduced growth.

Minority shareholders in the European pay-television units also may cause problems for BSkyB's plans for the newly-acquired companies, according to Jerry Dellis, an analyst at Jefferies in London.

Under the terms of the deal, BSkyB said it would acquire 21st Century Fox's 100 percent holding in Sky Italia for 2.5 billion pounds, or about $4.3 billion. The agreement includes Pounds 2. …

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