The proposed merger between Twenty-First Century Fox and Sky is a step closer after the two companies ironed out the remaining hitches associated with the £11.7 billion deal.
US-based Twenty-First Century Fox announced last week that it had offered £10.75 per share for the 60.1 percent of Sky that it does not already own.
A group of independent Sky directors agreed to sell at that price, which represented a 40 percent share premium, but said “certain material offer terms” remained “under discussion”.
These discussions have now ended in agreement with the companies revealing what they concerned.
Twenty-First Century Fox has agreed not to deduct Sky dividends from 2018 from the offer price, provided they do not breach certain caps.
Further, a special dividend of 10 pence per share will be paid to all Sky shareholders if the deal has not concluded by 31 December 2017. This also will not be taken off the offer price.
Finally, Sky has agreed not to pay any dividends during 2017.
Should the deal get approval from Sky shareholders and then regulatory clearance, it would bring together 21st Century Fox’s various content businesses with Sky’s satellite, OTT TV, broadband and fixed telephony services.
Twenty-First Century Fox said in a statement: “As the founding shareholder of Sky, we are proud to have participated in its growth and development.
“The strategic rationale for this combination is clear.
“It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.
“It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.
“The enhanced capabilities of the combined company will be underpinned by a more geographically diverse and stable revenue base.
“It will also create an improved balance between subscription, affiliate fee, advertising and content revenues.”
The Rupert Murdoch-owned company tried to acquire Sky in 2010 but had to withdraw its offer following the phone hacking scandal related to the UK newspaper arm owned by its then parent News Corporation.