Murdoch pushes BSkyB flotation

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The Independent Online
NEWS CORPORATION is the driving force behind plans to float British Sky Broadcasting, the satellite network in which it has a 50 per cent stake, by the end of the year. Goldman Sachs and Lazard Brothers, the investment banks, have been asked to advise.

Stockbrokers, who have been vying for the right to handle the flotation for months, have estimated BSkyB could be worth more than pounds 4bn, twice the size of media groups like Carlton.

The flotation of BSkyB could raise around pounds 400m for New Corp and an equal amount for BSkyB's other main shareholders - Pearson, the media group, and Chargeurs, the French company, which have 17.5 per cent each, and the conglomerate Granada which holds 13.5 per cent.

In addition, it would also provide a good opportunity for BSkyB to refinance some or all of the loans outstanding to its shareholders, worth around pounds 1.25bn. BSkyB has already refinanced more than pounds 500m in loans due to shareholders, and has promised to repay at least a further pounds 200m this year.

The exact terms of the flotation are the subject of negotiation. Granada, for instance, has made it clear that it would like eventually to dispose of its stake, although it is in no hurry to do so, while Chargeurs and Pearson would like to boost their holdings.

'The pressure on this is coming from News Corp,' said an industry source. 'Murdoch is pushing on an open door - no one has any objections to a float - but he is the one who wants it done by next spring at the latest.'

BSkyB said it was unable to comment on the rumours. But there are powerful arguments for floating the company before it begins to experience stiff competition, especially from cable companies.

'It'll never be worth more than it is now. It's always better to travel hopefully than to arrive,' said one analyst.

News Corp wants to float around 20 per cent of the company in London and New York. Shareholders would contribute in proportion to their holdings.

Flotation would mean Mr Murdoch could free resources to concentrate on the US TV market, where he has long been rumoured to favour a big acquisition.

Television is increasingly the motor behind News Corp's profits, and with the acquisition of Star, the Asian satellite network, and investments in Europe such as the purchase of a stake in Vox, the troubled German TV station, Mr Murdoch has signalled that it has become the group's main focus.

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