21st Century Fox Announces Recommended GBP 11.7 Bln Cash Offer For Sky Plc

(RTTNews) - Twenty-First Century Fox, Inc. (FOX, FOXA) said that it has reached agreement with Sky plc (BSY.L, SKY.L) on the terms of a recommended pre-conditional cash offer by 21st Century Fox for the fully diluted share capital of Sky which 21st Century Fox and its affiliates do not already own. As per the terms of the Acquisition, Sky shareholders will be entitled to receive for each Sky share 10.75 pounds in cash. The Cash Consideration implies a value of about 11.7 billion pounds or $14.8 billion.

The price of 10.75 pounds per Sky share represents a premium of approximately 40 per cent to the closing price of 7.69 pounds per Sky share on December 6, 2016, being the last business day before the date on which an initial proposal was received from 21st Century Fox by Sky.

21st Century Fox currently anticipates that the Acquisition will complete before the end of 2017. Under the terms of the Acquisition, if the Effective Date has not occurred on or before December 31, 2017, Sky shareholders shall be entitled to receive a special dividend of 10 pence per Sky share, payable in 2018.

The price of 10.75 pounds per Sky share shall be reduced to the extent that the dividend in respect of the six months ending December 31, 2017 exceeds 13.06 pence per Sky share; and the dividend in respect of the year ending June 30, 2018 exceeds 21.8 pence per Sky share.

Sky will not pay any dividends in 2017.

The Cash Consideration implies a value of approximately £11.7 billion ($14.8 billion based upon an exchange rate of USD:GBP 1.27) for the fully diluted ordinary share capital of Sky, excluding the Sky shares already owned by 21st Century Fox and its affiliates.

The independent committee of Sky intends to recommend unanimously that unaffiliated Sky shareholders vote in favour of the Acquisition.

21st Century Fox entered into the Co-operation Agreement with Sky pursuant to which 21st Century Fox and Sky agreed to take certain steps to facilitate completion of the Acquisition. The Co-operation Agreement provides for a 200 million pounds break fee payable by 21st Century Fox in the event that regulatory approvals are not obtained prior to the longstop date described in the agreement.

21st Century Fox and its 100% owned subsidiary 21st Century Fox America, Inc. entered into a Bridge Credit Agreement with Goldman Sachs Bank USA, Deutsche Bank Securities Inc. and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners. The Bridge Credit Agreement provides for borrowings of up to 12.2 billion pounds.