Deal for pan-European Sky moves forward

BSkyB CEO Jeremy Darroch

UK pay TV operator BSkyB has hired Morgan Stanley and Barclays to advise on its plans to create a pan-European pay TV giant combining its operations with those of 21^st Century Fox stable-mates Sky Deutschland and Sky Italia, according to a Reuters report.

According to Reuters, citing a source familiar with the matter, both banks, which already advise BSkyB, are being retained for the proposed deal, which could see the creation of a single pan-European pay TV entity with close to 20 million subscribers.

BSkyB revealed last month that it is in preliminary talks that could see it buy 21^st Century Fox’s 55% stake in Sky Deutschland and wholly-owned Sky Italia. The deal would see Fox retain its 39% in BSkyB at the same level in the enlarged company, avoiding crossing a threshold that would see it forced to bid for the company, something that could fall foul of UK regulators.

The UK Sunday Times, owned by 21^st Century Fox’s sister company News Corp, yesterday reported that a deal could deliver a windfall of as much as €8.5 billion to 21^st Century Fox.