Sky chiefs set for £38m payday in Fox takeover

Murdoch move delights investors on premium price for £18.5bn giant

SKY bosses Jeremy Darroch and Andrew Griffith are in line to share a bumper £38million payday if a proposed takeover of the company by Rupert Murdoch’s 21st Century Fox goes ahead.

Under his contract Darroch, chief executive, has rights to just over 2.2 million shares in Sky while chief operating officer Griffith has rights to 1.3 million. Fox is considering offering £10.75per share, a 40 per cent premium on Sky’s share price before Fox’s initial approach. Both men are likely to be able to cash in their shares should a deal with Fox be completed.

This would make Darroch’s share awards worth £24.5million while Griffith’s would be worth £13.7million, less of tax and other deductions.

In addition, both men hold substantial shareholdings in Sky with Darroch’s 689,871 shares worth £7.4million and Griffith’s 172,445 shares worth £1.8 million.

Sky, chaired by Murdoch’s son James, is the leading pay-TV broadcaster and broadband supplier, with more than 12 million customers. Darroch joined in 2004 and took over as chief executive in 2007, while Griffith joined in 1999.

Sky’s shares have already leaped in value following news of 21st Century Fox’s approach with a possible all-cash proposal for the 61 per cent of Sky that it does not already own, which would cost it £11billion and value the pay-TV group at £18.5billion.

Darroch was paid £4.7million in the year to the end of June, down from £17.8million previously, while Griffith earned £2.4million this year compared with £9.3million in 2015.

Fox already owns 39.1 per cent of Sky and independent shareholders told The Mail on Sunday that they regarded the possible offer of a 40 per cent premium on the share price as ‘way above’ what such a significant shareholder would normally offer. They cited British American Tobacco’s bid for US tobacco group Reynolds in October which was a 20 per cent premium for a company in which BAT already had a 42 per cent stake. Sky’s directors have approved the possible offer price.

A leading Sky shareholder said: ‘Fox has timed this quite well, it’s a good premium from the current share price, but it is whether you believe the current share price is the right one – Sky has

languished on the stock market over this past year.’

The approach comes five years after Rupert Murdoch abandoned a previous offer for BSkyB, as Sky was then, in the wake of the phone hacking scandal which led to the closure of his newspaper The News of the World and the subsequent Leveson Inquiry into the press.

Since then Murdoch has split his business in two, with 21st Century Fox holding his film, television and cable interests including the Fox News organisation and his stake in Sky, while News Corp contains his newspaper interests including The Times, The Sunday Times, The Sun, New York Post and The Wall Street Journal.

Splitting his businesses in this way is expected to ease any regulatory problems if he makes an offer for Sky, said people close to the deal.

‘We do not foresee huge problems on this and we cannot see that there are likely to be greater barriers than last time when the newspapers were all part of the same group. Fox is a separate company now,’ said an insider.

BSkyB merged with Sky Italia and Sky Deutschland in a £7billion deal in 2014 and was renamed Sky.