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News Eyes More Sky

6/21/2010 3:36 PM Eastern

About Two Years After Selling Its Interest In DirecTV, News
Corp. has set its sights on hammering out a deal to
consolidate the largest satellite-TV provider in the
United Kingdom, British Sky Broadcasting.

News Corp. has already made an $11.5 billion
($10.33 per share) offer for BSkyB that was summarily
rejected by its board of directors. The board has said
it would accept a price of $11.81 per share, and the
two parties said they are working together to reach
an agreement.

If a deal is done, News Corp. would acquire the 61%
of BSkyB it doesn’t already own.

The deal would come about two years after News
Corp. sold its controlling interest in DirecTV (the
largest U.S. satellite-TV operator, with 19 million
subscribers) to Liberty Media in a deal valued at about
$11 billion.

BSkyB is the dominant pay TV provider in Britain,
with about 9.8 million video, voice and data
subscribers. Launched in 1989 and headed by News
Corp. chairman Rupert Murdoch’s son James, BSkyB
largely built its base by acquiring rights to English
Premier League soccer. News already owns about
39.1% of the company.

“We believe that this is the right time for BSkyB to
become a wholly owned part of News Corporation
with its greater scale and broader geographic reach,”
News Corp. chief operating officer Chase Carey said in
a statement. “For News Corp., our proposal presents
an opportunity to consolidate a core business with
which we have been closely associated for over two
decades. News Corp. will also benefit from increasing
the geographic diversification of our earnings base,
reducing our exposure to cyclical advertising revenues
and increasing our direct consumer subscription
revenues.”

September