The hedge fund manager Crispin Odey has thrown down the gauntlet to BSkyB by saying that the British pay-TV firm’s plan to take over Sky Deutschland “significantly understates” the value of the €6bn (£5bn) German company.
Mr Odey’s intervention has a personal twist as he is the former son-in-law of Rupert Murdoch, whose 21st Century Fox is the biggest investor in BSkyB and Sky Deutschland.
Sky Deutschland shares soared almost 10 per cent yesterday, after BSkyB confirmed it is looking at a takeover of both Sky Deutschland and Sky Italia to create a £20bn-plus European pay-TV giant.
Analysts reckoned this showed BSkyB was likely to have to pay extra for Sky Deutschland – despite BSkyB reportedly insisting the German company’s share price must remain “undisturbed”.
Mr Odey holds considerable sway over Sky Deutschland as his firm Odey Asset Management holds 8 per cent.
“The current proposal, a nil-premium takeover of the minorities of Sky Deutschland, significantly understates the value of the company,” Odey Asset Management said.
BSkyB shares fell 21.5p to 868.5p as the City worried a deal could be fraught with problems.
The move to create a “Sky Europe” has long been rumoured as Mr Murdoch would like to inject the British company’s market-leading expertise into the less successful European operations.
BSkyB said: “At the right value, this combination would have the potential to create a world-class multinational pay-TV group.” But the company said talks were at a preliminary stage and “no agreement has been reached on terms, value or transaction structure”.
Fox holds 39 per cent of BSkyB, about 57 per cent of Sky Deutschland and 100 per cent of Sky Italia. BSkyB is valued £14bn and Sky Italia could be worth around €4bn to €5bn, according to Bloomberg.
City observers worried that BSkyB’s growth and margins could be dragged down by expanding in Europe. But UBS said a deal could be “strategically positive”.
Mr Murdoch tried to take full control of BSkyB in 2010, but aborted plans because of the phone-hacking scandal.
Mr Odey, who used to be married to Mr Murdoch’s daughter Prudence, is thought to have an amicable relationship with the media mogul. During the BSkyB takeover, Mr Odey also argued its share price was undervalued.