Rivals reach for the Sky
The battle for the future of Sky is far from over. of all the assets that 21st Century Fox has sold to Walt disney, the most precious to Rupert Murdoch was the British satellite broadcaster.
over the decades, the Murdoch dynasty invested heavily in building Sky’s technology, buying in the best sports content and building its own entertainment studios.
But in the end it became something of a deal breaker, with disney boss Bob Iger insisting that Fox’s 39pc stake in Sky be part of the deal because it wanted its distribution across europe and the streaming capacity it has developed through Now TV.
It now emerges that the US cable giant Comcast, disney’s rival for 21st Century Fox, may seek to prise Sky away from Fox with a direct bid.
When Comcast, disney and others were poring over Fox assets, Sky was excluded from any of the no-disclosure agreements giving potential bidders freedom of action.
Within Sky there is considerable anxiety about what Iger and disney have in mind for the group, if and when it gets full control.
disney is understood to be less interested in Sky’s content (having more than enough of its own) and is only lukewarm about Sky News, even though it is seen as a gateway into markets such as international hotels.
The great paradox is that the long delay to government approval of the Fox bid, caused by the intervention of Murdoch critics ed Miliband and Vince Cable, may condemn Sky to disinterested overseas ownership. Worse, it could eventually diminish news plurality in Britain.
If Comcast were to come after Sky, it could only be positive for investors. The Sky board and deputy chairman Martin Gilbert required the Murdochs to double an initially offered share price premium. Comcast, or any other bidder for Sky, would have to pay even more.
They should also be asked to make ironclad pledges about production, innovation and jobs.
Bring it on.
Housing horrors
THERE can be few worse adverts for free market capitalism than Britain’s housebuilders. down and out during the financial crisis, they have rebuilt their fortunes on the back of low mortgage rates, help To Buy and soaring ground rents.
The most outrageous example of unadulterated greed is at Persimmon, which has thrown chairman Nicholas Wrigley and pay chief Jonathan davie off the board.
These two City veterans were responsible for awarding a £126m pay package to chief executive Jeff Fairburn.
others winning as a result of the insouciance by independent directors are finance chief Mike Killoran, who has long-term bonus shares currently showing a paper profit of £89m, and group managing director dave Jenkinson, who sits on £63m.
The scale of the payouts and the failure to spot political danger can partly be attributed to distorted City values. Wrigley is a vice-chairman of Rothschild and davie a former head of equities at Barclays. Both work, or have worked, for elite organisations where big money is a way of life.
Persimmon is not alone among the housebuilders with its distorted values. As well as fat pay packets, some directors and senior managers have the right to buy houses on the cheap, which they can then rent out or flip at a later date, making a handsome profit. This is the equivalent of insider trading.
Getting rid of the directors who greenlighted these rewards is not enough.
As the long-term share plans are vested, cash should immediately be transferred to a charitable trust for the homeless and people sleeping rough.
As a result of unvarnished greed, Persimmon, Berkeley homes and the like have gifted Jeremy Corbyn and the labour Party an easy target.
Thames trickery
JUST as we were starting to believe that Thames Water might finally be cleaning up its act, after years of financial engineering, it is disclosed that it is raising a £145m bond through a Cayman Islands structure.
Thames claims that it lacked other legal vehicles to raise the money.
The very idea that the City of london, with its huge fundraising and legal capabilities, is unable to do a bond issue in rapid time is risible.
The credibility of chief executive Steve Robertson’s pledge to end offshore fundraising is in tatters.