Sky Deutschland board tells minority shareholders to reject BSkyB offer
Joseph O'Halloran
| 18 September 2014
In what was thought to be a done deal, the takeover of Sky Deutschland by BSkyB has hit a snag after the German company's executive board told minority investors to reject the takeover bid.

On 25 July 2014, UK pay-TV giant BSkyB announced that it had acquired from 21st Century Fox 100% of Sky Italia and taken a 57.4% stake in Sky Deutschland as part of its plans to create a pan-European entity that has been dubbed Sky Europe.

The total consideration for the acquisition of Sky Italia was 2.45 billion, with approximately 2.07 billion to be paid in cash and the balance to be satisfied through the transfer of BSkyB's 21% stake in National Geographic Channel International to 21st Century Fox at a value of 382 million. The acquisition of 21st Century Fox's shareholding in Sky Deutschland was for a consideration of 2.9 billion in cash, valuing Sky Deutschland at 6.75 per share. Pointedly, it was stressed that both transactions were subject to regulatory and independent shareholder approval.

Yet only hours after the European Union's antitrust authority granted permission for the deal to go through on the grounds that it didn't feel as though the transaction would hinder competition Sky Deutschland's executive and supervisory boards were warning independent shareholders that the BSkyB did not reflect the company's full potential and intrinsic value. To drive home the point, chief executive Brian Sullivan announced that he would not be selling his holding.

Even though the move by Sky Deutschland's board will not deter BSkyB's ultimate takeover, analysts believe that is presents a warning sign of future boarding battles between the corporation and the minority shareholders.