Viewers to be offered shares in Sky float: Satellite broadcaster is set to be the UK's biggest non-privatisation issue, with value of pounds 5bn

BRITISH Sky Broadcasting viewers will be targeted by the City to buy shares in the satellite channel when it is floated later this year.

It will be the UK's biggest non- privatisation issue, with analysts estimating its market capitalisation at up to pounds 5bn - twice the size of existing television groups such as Carlton Communications.

'There are three and a half million BSkyB subscribers, and it seems to us they are a natural source of potential retail interest,' a spokesman for Lazard Brothers, the merchant bank jointly advising on the flotation, said.

'Sky is extremely experienced in marketing,' he said. 'We are exploring several ways of selling it to subscribers.'

Shareholders in BSkyB confirmed yesterday that they had reached an outline agreement that the channel should be floated soon, probably before Christmas. It will seek a listing in London and New York.

The main beneficiaries will be its four main shareholders - Rupert Murdoch's News Corporation; Pearson, which publishes the Financial Times; the French media group Chargeurs; and Granada, the television and service station conglomerate.

The channel was formed in 1990 by merging the ailing British Satellite Broadcasting with the equally sickly Sky Television. Its fortunes have been transformed by switching to subscription-only for most of its channels. Last year it added more than a million subscribers - it now has about 3.5 million - and made operating profits of more than pounds 185m.

The pounds 5bn flotation promises to be a bonanza for the satellite network's City advisers.

These include Barclays de Zoete Wedd, which has fought off stiff competition to become the company's joint London stockbroker alongside the US investment bank Goldman Sachs.

Goldman is likely to be the biggest beneficiary from the flotation. It will act as global co-ordinator and lead manager, while Goldman and Lazard Brothers, the UK merchant bank, will jointly be the satellite network's co-sponsors and advisers.

About 20 per cent of new equity in the company will be offered for sale and the hope is that sufficient funds will be generated to repay the pounds 1.2bn of outstanding shareholder debt. Analysts estimate BSkyB's market value could be up to pounds 5bn.

To the extent that the price is insufficient to repay the shareholder debt in full, bank debt will be raised to replace it. The exact capital struture will not be decided until the price is fixed.

After the share issue, existing holdings will be diluted and News Corp is expected to end up with 40 per cent. Pearson's holding will drop to 14 per cent and Granada's to 10.5 per cent.

However, Chargeurs intends to buy shares in the issue to keep its stake at about 17 per cent.

The flotation document is likely to involve a promise by the existing shareholders to hold their stakes for at least a year.

(Photograph omitted)

Suggested Topics
PROMOTED VIDEO
Life and Style
fashion
News
videoJapanese prepare for the afterlife by testing out coffins
Arts and Entertainment
Harrison Ford attends Blade Runner at Target Presents AFI's Night at the Movies at ArcLight Cinemas on 24 April, 2013 in Hollywood, California
film... but Ridley Scott won't direct
Sport
Hughes is hit by a bouncer from Sean Abbott
cricketStephen Brenkley on batsman's tragic flaw that led to critical injury
Sport
Dejected England players applaud the fans following their team's 3-0 defeat
football

News
people

Actress isn't a fan of Ed Miliband

News
ebooksNow available in paperback
Life and Style
Stefan Gates with some mince flies
food + drink
Arts and Entertainment
Rooney Mara plays a white Tiger Lily in forthcoming film Pan
filmFirst look at Rooney Mara in Pan
Life and Style
Customers browse through Vinyl Junkies record shop in Berwick Street, Soho, London
tech
Life and Style
health

Do you qualify – and how do you get it?

Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

h2 Recruit Ltd: Business Development - Telecommunications - £50,000 OTE

£25000 per annum + £50,000 OTE: h2 Recruit Ltd: London, Reading , Southend, Al...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital