It has been increased once to 1,075p a share from a rumoured sighting shot of 1,000p a share early last week. Otherwise Sky’s independent directors could look too malleable to the interests of the largest shareholder to the disadvantage of other institutional investors and small shareholders.
The deal is much complicated by the fact that James Murdoch, Rupert’s son, is involved with a foot in both camps as Sky’s chairman and Fox’s chief executive. Meanwhile, Rupert and his other son, Lachlan, are executive co-chairmen of Fox. Media webs aren’t the half of it.
If the price was upped from what is currently seen as a lowball offer, that would just leave the political hurdles to negotiate five years after Murdoch senior last tried to take full control of Sky via his News Corporation interests, only to be derailed by the phone hacking scandal.
However, there are two big changes since the last time he made his move. Fox, the magnate’s TV and film business, and News Corp, the newspapers, have been split into separate entities, so the argument about media plurality that dominated the debate five years ago is not quite the same.
In addition, many more people now use the internet for news – witness the post-truth journalism of the American presidential election – than mainline and paid-for TV and newspaper journalism.
There is also a change of government, and Murdoch could argue that the totality makes it a wholly different situation in terms of anti-trust issues to when he was blocked before. The fact that if the 1,075p offer is rejected the only way for the languishing Sky share price is down may also embolden him to negotiate with the regulator Ofcom and the politicians, while facing down other investors by still gaining the company on the cheap.
Many investors might also welcome the chance to get out of Sky given they have always felt they were in the shadow of the media mogul’s major interest.
The only thing standing against that outcome is Sky’s independent directors being determined enough to argue that Sky remains a medium-term growth story that Fox needs to shell out more money for than it is so far prepared to do.