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Vince Cable gaffe means it’s a clear run for News Corp in bid for BSkyB

European Commissioner Joaquin Almunia has comprehensively cleared News Corporation’s bid for UK pay-TV broadcaster BSkyB (we’d better start giving it its full moniker).

This may or may not influence UK regulator Ofcom which is looking into ‘plurality’ issues.

Almunia is careful to point out, gratefully no doubt, that plurality is a matter for the UK authorities. But actually his careful and wide-ranging report covers it. The proposed takeover doesn’t affect media plurality in the UK because it is unlikely to add to the near-stranglehold News Corporation already enjoys.

People may not like this very much but, short of demanding a break up of News in the UK, there’s not much they can about it.

The issue has been complicated by the personal position of our old friend Vince Cable who has been blabbing to all and sundry about, among other things, his opposition to all things Rupert Murdoch. Unfortunately for him these people included a (decidedly giggly) undercover sleuth from the Daily Telegraph.

Now Vince is off the case although still in the Government. Culture secretary Jeremy Hunt has been charged with saying, “sorry Mr Murdoch, it’s all yours.”

Anyway, let’s ignore Vince and, indeed, Jeremy for now. Attention should switch to the directors and shareholders of BSkyB. Murdoch has already bid 700p a share, most pundits think 800p, valuing the whole company at £12.3bn, would be a take-out price.

But if BSkyB, having invested heavily in high definition, 3D and generally growing subscriber numbers and acquiring content, really is going to make bank-style profits in the future, as its rivals fear, then £12.3bn doesn’t look anyway near enough.

£20bn might be more like it, £15bn for sure.

A complication of course is that News already owns 39.1 per cent of BSkyB and so nobody else, not even the most venturesome private equity consortium, is likely to bid for the company.

So should the directors, who include CEO (and Murdoch appointment) Jeremy Darroch and high profile independent director and former Asda boss Alan Leighton (pictured), say thank you very much to Rupert and take his low bid (assuming he’s willing to increase it to 800p)?

No they shouldn’t because they know the company is worth a lot more, regardless of the number of potential buyers out there.

And the best way to clip the Murdoch wings is to force News to borrow so much money to buy BSkyB that it has to put further world domination on hold for a few years.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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