Hunt to approve BSkyB purchase

Published on Wednesday 27 April 2011 15:58

CITY analysts expect Culture Secretary Jeremy Hunt to announce as early as Tuesday his decision to wave through News Corporation's bid to take over the 61 per cent of BSkyB it doesn't yet own.

The government is likely to show the deal the green light despite angry protests from a consortium of rival media organisations including BT, Guardian Media Group, Associated Newspapers, Trinity Mirror, Northcliffe Media and Telegraph Media Group.

All attention is now focused on the price Rupert Murdoch's News Corp could be forced to pay after its 700p a share offer - which valued the company at 12.3 billion - was rejected last summer.

At the time, BSkyB's board indicated that it would accept nothing short of 800p a share but the digital broadcaster's stock has since risen to 842p and some shareholders are now looking for a price between 950p and 1,100p.

A robust set of first-quarter figures released last week has added further pressure on News Corp to up its offer price after BSkyB beat expectations to add 51,000 customers at the start of the year.

Many analysts feel there is plenty more room for growth, particularly in high definition, which only accounts for around 37 per cent of its existing customer base.

Analysts at Nomura say that even if News Corp was forced up to 1,050p a share, the deal would be a good buy.