Sky "confirmed it was in talks" over a possible deal to buy the German and Italian pay-TV assets owned by Rupert Murdoch's 21st Century Fox, according to the London TELEGRAPH. The company said it had "initiated preliminary discussion" to buy the stakes in Sky Deutschland and Sky Italia. Fox said in a statement on Monday, "Over the years we've had numerous internal discussions regarding the organizational and ownership structure of the European Sky-branded satellite platforms. From time to time these conversations have included BSkyB, however no agreement between the parties has ever been reached" (TELEGRAPH, 5/12). On the WALL STREET JOURNAL's Money Beat blog, Nina Bains wrote Sky Deutschland "became the fastest riser in the Stoxx 600 Monday morning." Sky "became the fastest faller on the FTSE 100" after it confirmed that "it was in preliminary talks with 21st Century Fox." UBS said that the move "would be strategically positive" for Sky, "creating a financially stronger player that could acquire pan-European rights and invest in original programming while also being able to leverage this over a larger footprint." However, "not everyone was convinced." J.P. Morgan said that such a deal "would be expensive" for Sky to complete while the synergies achieved "would unlikely be substantial." Meanwhile, the necessary approvals "might also be difficult to obtain." Credit Suisse "also noted that investors may initially be disappointed" that Fox -- which own 39% of Sky -- "isn’t considering a bid for the U.K. company" (WSJ, 5/12). In London, Christopher Williams reported Ofcom "is poised to obstruct" any attempt by Murdoch to unite his continental pay-TV businesses with Sky "in a way that would give him overall control of the British satellite broadcaster." Sources said such a deal "would be likely to prompt opposition from the communications regulator, based on media plurality concerns" (TELEGRAPH, 5/12).
