News Corp. said Tuesday that it has made an offer to consolidate United Kingdom satellite juggernaut British Sky Broadcasting, proposing to purchase the remaining 61% of the company it doesn't already own for an estimated $11.5 billion.
But both parties are still apart on price - BSkyB has said it would accept an offer of 800 pence ($11.81) per share, while News Corp. has offered 700 pence ($10.33) each. The two have agreed to work together to receive the necessary regulatory approvals and reach an agreement on an appropriate price.
BSkyB shares were up about 19% to 715 pence ($10.58) in early trading on the London Stock Exchange Tuesday.
BSkyB, headed by News Corp. chairman Rupert Murdoch's son James, is the largest satellite TV provider in the U.K. with about 9.8 million video, voice and data customers. BSkyB launched in 1989 and largely built its base by acquiring U.K. Premiership soccer rights. 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."
According to a press release, News Corp offered 675 pence ($9.96) per share for the BSkyB stock on June 10, which was rejected by the satellite giant's board of directors. News later upped that offer to 700 pence ($10.33) per share.