Market Report: Takeover scenario helps BSkyB recover from fall


What could the future hold for BSkyB if News Corp is forced to sell down its stake? That was the poser being mulled over in the Square Mile yesterday following a step-up in pressure on the Murdochs' control of the satellite broadcaster.

After the news that the regulator, Ofcom, has upped its investigation into whether the group should hold a broadcasting licence in the wake of the hacking scandal, analysts were considering the possible scenario of News Corp – which was forced to shelve a £8.3bn takeover attempt last year – being ordered to get rid of its 39 per cent controlling stake.

UBS's Polo Tang was insistent that the prospect of such an event should not be seen as an "overhang". Instead, said the analyst, "any forced sale of such a strategic stake ... could potentially flush out a bidder for the whole company and therefore lead to hopes of a takeover".

Bank of America was considering the same scenario, with the broker saying that a complete exit may lead to speculation over whether either a US media company or a private equity firm could be interested in launching an approach.

Despite the chatter, the general consensus remained that a forced disposal of News Corp's entire stake was unlikely, while many were also sceptical about the possibility of it being instructed to reduce its holdings.

Nonetheless, the mention of potential takeover activity helped BSkyB to recover from an early fall, and it eventually closed 2.5p better off at 696.5p.

Overall, with non-farm payroll employment figures from the US managing to just about beat expectations, the FTSE 100 continued its recent recovery. A rise of 27.76 points to 5,887.49 meant the benchmark index finished the week less than 25 points lower than where it started, despite having shed 145 points over Monday and Tuesday.

The closely followed data helped many of the miners – including Vedanta Resources (up 28p to 1,421p) and BHP Billiton (up 35p to 2,023.5p) – to shrug off the decision by UBS to downgrade the sector's rating to "neutral" following its recent rally.

Analysts from the broker also raised their recommendation for the pharmaceutical and media companies to "overweight", as the drugs maker Shire advanced 42p to 2,247p while the X Factor broadcaster ITV edged up 0.5p to 87.15p.

SAB Miller was knocked back 5.5p to 2,610.5p after its Foster's business – which it recently snapped up in a £6.5bn deal – lost the licence to distribute Corona Extra in Australia. The lager is the most popular imported beer Down Under, and although the Grolsch brewer said the financial returns from the takeover remained "broadly unchanged" despite the news, Deutsche Bank claimed the loss "makes it more difficult to achieve what, in our view, are already challenging synergy numbers for Foster's".

At the same time, Natixis' scribblers were playing down the recent bid speculation that has helped SAB, saying the decision by Budweiser-owner Anheuser-Busch InBev on Thursday to up its dividend by 50 per cent showed it was unlikely to be looking for a major acquisition any time soon.

International Power closed on the Footsie's leaderboard despite analysts from both Investec and Goldman Sachs playing down rumours that France's GDF Suez could soon move for the 30 per cent of the energy group it does not already own. However, that did not stop the speculation persisting as the company sparked up 7.8p to 366p.

Down on the FTSE 250, Cable & Wireless Worldwide was lifted 2p to 36.2p following the news that the mobile phone giant Vodafone (1.55p weaker at 168.65p) now has until 29 March to decide whether to make an approach for the telecoms firm – the same deadline given to India's Tata Communications.

Dairy Crest shifted 10.4p higher to 337.3p following its announcement that it may sell its French spreads unit St Hubert, with some claiming the Cathedral City owner could pocket around £300m from a disposal.

Meanwhile, the London Stock Exchange moved up 67.5p to 965.75p after finally agreeing a deal with LCH.Clearnet which will see it take as much as 60 per cent of the clearing house.

Down on AIM, a profits warning by Software Radio Technology left the marine technology firm a huge 20.17 per cent worse off at 23.75p. The Square Mile had been expecting revenues for the year of £11.6m, but instead the group announced that – thanks to delayed orders – it was estimating just £6m.

Meanwhile, New World Oil and Gas was pegged back 0.62p to 8.38p after the explorer raised £8.5m through a placing priced at 8p a share.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power