US media giant 21st Century Fox, controlled by Rupert Murdoch, has made an £18.5bn ($23.3bn) preliminary takeover deal with UK-based satellite broadcaster Sky.
Murdoch, who already controls a 39.1% stake in Sky, and the independent directors of both companies have agreed at an offer worth £10.75 per share in cash, with Sky shares ending 26.6% higher at 999.8p in London after the announcement.
It is believed that the company has become more attractive due to Sterling’s 16% fall against the US dollar following the Brexit result. However, there has been some criticism over how rapidly a price was agreed, despite Fox rejecting a lower offer two days earlier on 6 December 2016.
Under UK takeover rules, Fox will have to “clarify its intentions” by 6 January 2017 or distance itself for at least six months.
Earlier in the year Fox chief executive James Murdoch was named chairman of Sky, despite almost 30% of Sky shareholders voting against the appointment, adding to the rumours that the US company would make a bid.
This is not the first time Murdoch has sought full control of Sky. In 2010, his company News Corporation made an offer valuing the company around £12bn which was rejected and ultimately abandoned during the 2011 fallout to the phone hacking scandal that led to the closure of the News of the World newspaper. Opposition also raised the threat of media plurality in the UK.
Sky has increasingly positioned itself as a player on the international media landscape, offering access to audiences in the UK, Ireland, Germany, Austria and Italy.
Read our interview with Sky Media managing director John Lister here about how the company’s first global advertising partnership.