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Sky soars on takeover by Murdoch's Fox

Shares surge after broadcasting group agrees £18 billion takeover by Rupert Murdoch's US media group 21st Century Fox.

 
Sky soars on takeover by Murdoch's Fox

Update: Shares in Sky (SKYB) have surged after the broadcasting group agreed to an £18 billion takeover by Rupert Murdoch's US media group 21st Century Fox (FOXA.O).

The shares jumped 26.7% to £10 after Sky announced it had reached agreement on a £10.75-per-share deal from Fox for the 61% of the company it does not already own.

Fox's move marks a resurrection of the deal it had attempted to make five years ago, but was forced to abandon at the height of the phone hacking scandal.

Liberum analyst Ian Whittaker said this time around, Fox's bid was unlikely to hit the sort of obstacles it encountered in 2011.

'We do not think there would be any such political or regulatory issues now,' he said. 'The UK government is keen to promote investment in the UK post the Brexit vote. We doubt therefore that it would want to veto what could be viewed as a major sign of confidence in the UK market.'

(9:25) Capita faces FTSE 100 relegation

Capita (CPI) has fallen to the bottom of the FTSE 100 for a second successive day as investors continued to dump the stock following yesterday's profit warning.

Shares in the outsourcing group fell 6.6%, with the stock now down more than 19% in the last two days. This year the shares are down 62.4% amid a bleak environment for outsourcing companies following the Brexit vote.

Capita yesterday cut its profit forecast for the second time in three months, warning profits for the year could fall as low as £515 million.

The scale of the decline in its share price means the company is now vulnerable to relegation from the FTSE 100 into the 'mid cap' FTSE 250 index.

Robin Speakman, analyst at Shore Capital, cut his 2017 earnings forecast by 20% to 50p per share on yesterday's. 'Our model suggests that free cash flow available for strategic development and debt reduction post the dividend payment is set to remain under pressure,' he said. 'We retain a negative view on Capita therefore would use any recovery in the hare price to exit the stock.'

Capita was the biggest mover on the FTSE 100, which edged seven points higher to 6,939. On the FTSE 250, Euromoney Institutional Investor (ERM) was the biggest faller, down 9.2% as investor Daily Mail and General Trust (DMGOa) announced it was reducing its stake from 67% to 49% through a share placing. 

2 comments so far. Why not have your say?

Micawber

Dec 09, 2016 at 17:23

Ah, the SKY knock-on effect accounts for the 5% surge in ITV today, I suppose. I was wondering what prompted that (apart from the material undervaluing of ITV lately)

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Nick-

Dec 09, 2016 at 17:48

I wood like to know who and how many Sky shares were purchased prior to today's announcement ?

People in the know can only be envied.

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Woodford buys ITV on 'compelling' valuation

by David Campbell, Dylan Lobo on Oct 20, 2017 at 07:39

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