Sky shares jumped 18 per cent this morning on news that Rupert Murdoch is seeking full control of the company.
Murdoch's News Corp is offering 700p per share - an offer rejected by Sky's board of directors. Murdoch's son James has removed himself from negotiations - he is Sky's chairman as well as chairman and chief executive for News Corp Europe and Asia.
Chase Carey, deputy chairman at News Corp, said the deal would improve News Corp's geographic spread, reduce its reliance on advertising money and offer the chance to fully consolidate a business it has worked with for over 20 years.
News Corp, which already owns 39.1 per cent of the company, originally offered 675p per share. After discussions this went up to 700p per share in cash.
Sky directors said an offer in excess of 800p per share would be more likely to be accepted. Some observers suggest directors want to compensate shareholders for what will likely be a long wait for regulatory approval.
The directors have agreed to further talks with News Corp to look for an agreement and have set up a committee to deal with discussions.
Both sides stressed that none of the above guaranteed a successful takeover would take place.
News Corp said the buy would be funded by existing cash and loans. ®