Murdochs had pounced after Britain's vote to leave the European Union in June has sent the pound down about 14 per cent against the US dollar and Sky's share price tumbling. Photograph: (Getty)
Fox has proposed buying 61% of Sky Plc, five years after a political scandal scuppered a previous bid
Rupert Murdoch's Twenty-First Century Fox Inc. has proposed buying the 61 per cent of British pay-TV firm Sky Plc it does not already own for around $14 billion, five years after a political scandal scuppered a previous bid.
The plan is conditionally backed by Sky's independent directors and would strengthen the position of James Murdoch - who is both chief executive of Fox and chairman of Sky - in his 85-year-old father's media empire.
People familiar with the matter said the Murdochs had pounced after Britain's vote to leave the European Union in June has sent the pound down about 14 per cent against the US dollar and Sky's share price tumbling.
Owning Sky would give Fox, whose cable networks include Fox News and FX, control of a pay-TV network spanning 22 million households in Britain, Ireland, Austria, Germany and Italy.
Marrying distribution with content is becoming increasingly important in a competitive media industry. Earlier this year, AT&T announced an $85.4 billion deal to buy Time Warner.
Rupert Murdoch's previous attempt to buy Sky provoked uproar from some British politicians, who said it would give the billionaire owner of The Sun and The Times newspapers too much control of the country's media.
That bid collapsed in 2011 when Murdoch's News Corp newspaper business was engulfed in a phone hacking scandal that intensified political opposition, led to a criminal trial, and to the closure of his News of the World tabloid.
Liberum analysts said Friday's proposal was likely to have an easier ride, partly because News Corp has now separated from Fox, which means the bidding firm no longer owns UK newspapers.
They also said the British government was keen to promote investment in the wake of the country's vote to leave the European Union and could present the deal as a sign of confidence in the economy.
James tightens grip
Fox's proposal of 10.75 pounds per share in cash is a 36.2 per cent premium to Sky's closing price on Thursday. It values the company at about 18.5 billion pounds ($23.2 billion) and the stake Fox does not already own at 11.25 billion pounds, according to Reuters calculations.
Sky's shares closed up 26.7 per cent at 10.35 pounds, while Fox's were down 2.9 per cent at $27.80 at 1800 GMT.
Before Friday's surge, Sky's shares had dropped 30 per cent this year in part due to concerns of an UK economic slowdown caused by Brexit.
The deal has also been made more attractive for the Murdochs by a drop in the value of sterling, which makes it cheaper for foreign companies to buy UK assets.
Long tipped as his father's successor, James Murdoch's reappointment as chairman of Sky earlier this year reignited speculation of another bid approach by Fox.
James had previously led Sky as chief executive and then chairman, helping to build it into Europe's biggest pay-TV company, before quitting during the phone hacking scandal.
Britain's takeover watchdog has set Fox a deadline of Jan. 6 to make a firm bid or walk away.