BSkyB says no to bid by Murdoch
The 700p-a-share approach for the 61 per cent of BSkyB that NewsCorp does not currently own values the FTSE 100 Index company at around 12bn.
BSkyB said the proposal significantly undervalued the business and called for an offer in excess of 800p a share, in part to compensate shareholders for the wait they would face while regulatory clearance was sought.
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Despite their differences over price, the two parties have agreed to begin work on the regulatory process required for a tie-up.
Any transaction would be seen as a test of the Government's attitude to media consolidation and the power of the Murdoch empire.
Mr Murdoch's son, James, is BSkyB's chairman and a senior executive at NewsCorp, but is not involved in the bid process.
BSkyB said its eight independent directors, including former Asda boss Allan Leighton, considered there was a "significant gap" between the proposal from NewsCorp and the value of the company.