BSkyB To Hold Off Sale Of Kirch Stake, Say Reports
BSkyB has reached an agreement with German media group, Kirch Pay-TV, not to exercise its rights to sell its minority stake in Kirch until 2003, according to a report in this morning’s Financial Times.
BSkyB, owned ultimately by Rupert Murdoch’s News Corporation, holds a 22% stake in Kirch. It has the right to sell this back to the German TV group for original investment plus interest (around £1 billion now). The FT report that under the terms of the agreement, if Kirch fails to meet its growth targets, Murdoch has the right to buy the whole business outright.
Analysts at ABN Amro believe that Kirch and BSkyB already have in place an agreement that will see Sky retain the stake until October 2002, rather than 2003.
Despite BSkyB’s right to exit from the Kirch business, the high losses there are impacting negatively on the UK satellite group’s market valuation.
At 9:45am today, shares in BSkyB were down 15p at 634p. ABN Amro has a target price of 887p.
