Media giant, 21st Century Fox, has made an official bid for Sky with a value of £18.5bn. The proposed offer is worth £10.75 that is of 36% to the closing price on 8 December.
The shares of Sky ended 26.6% higher at 999.8 points in London after the announcement. Businessman Rupert Murdoch rules over 21st Century Fox, owning a 39.1% stake in Sky.
According to Sky, the directors of both companies “reached agreement on an offer price” of £10.75 a share, but added that “certain material offer terms remain under discussion”.
Directors of Fox said Sky showed that they were willing to proceed the proposed offer. According to Reuters, Fox will pay £11.25 billion for the share in Sky that it does not own, already.
Fox is asked to “clarify its intentions” by the 6th of January 2017, or let it go for at least 6 months, under UK takeover rules. Analyst at Peel Hunt, Alex DeGroote said that it was “not quite a done deal“, however he will be surprised if it did not go forward.
“Sky has not performed well in the UK stock market this year, and is seen as a Brexit loser. Fox is of course also a dollar bidder, and the collapse in sterling makes Sky a less expensive purchase than pre-Brexit,” he said.
“There will also be cost synergies, which will reflect economies of scale in technology and content, such as sports and movie rights.”