Jim Armitage: Why Rupert Murdoch will get his deal, after token tough talkComments Off on Jim Armitage: Why Rupert Murdoch will get his deal, after token tough talk
The stars could barely be better aligned for the long-awaited sequel to Rupert Murdoch’s bid for Sky.
Opponents of Murdoch’s dominance of UK media last time around — Labour and Vince Cable — have been cast asunder in the Game of Thrones of UK politics; memories of phone hacking have arguably begun to subside; Brexit has punctured the Sky share price. There’s even an inexperienced new culture secretary in place with a former Sun political journo as her special adviser.
I may be reading this all wrong, of course. Analysts at Berenberg on Monday were predicting woman-of-the-people Theresa May might take up the cudgels against a “big bad media mogul”. They say her culture chief Karen Bradley might kick up a stink too.
But what government would make an enemy of the world’s most powerful media baron three months before launching the Brexit talks? My guess is there’ll be token tough talk, followed by a green light.
More of an issue is the offer price, which seems way too low.
Sky was trading at the current £10.75 bid level as recently as February, and the price was above 1100p when Vivendi supposedly sniffed around last April.
It seems the Murdochs, and Fox, would like Sky shareholders to believe the outlook for their company is pedestrian at best, what with all that extra competition from BT, Netflix and the rest. But if that’s the case, why do they want to buy it? Surely more likely is that they see future value in the business that the current share price isn’t reflecting.
It’s easy to make the case, as UBS analysts did earlier, that Sky is going to see big benefits coming through from its Premier League rights and investments in Germany, Italy and mobile, but not until 2018. Surely investors would be better off waiting, rather than ducking out at this price?
But, as shareholder Crispin Odey says, with Fox owning such a large stake, and Sky directors nodding the price through, it’s hard to see Fox making a higher offer now. Rupert will get his deal. Other investors will just have to lump it.
Rex marks the spot
If Exxon chief Rex Tillerson becomes US secretary of state, there will be one definite winner: Exxon.
The Texan gets on roaringly with Putin’s long-term consigliere and oil chief Igor Sechin: he even gave the Russian a cowboy hat during one of their many deals.
Their most memorable transaction was Exxon’s multi-billion Arctic tie-up with Rosneft. To the fury of Tillerson, the work was kiboshed by US sanctions.
With Tillerson at the tiller, sanctions would surely be eased.
Exxon’s share price, up 2% earlier, tells you all you need to know.