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London - Rupert Murdoch's News Corp revealed a bid of £7.8bn in cash on Tuesday for the near 61% of British pay-television group BSkyB which it does not yet own.
But BSkyB replied that the informal offer of 700p per share was too low and that it would be prepared to support a formal bid only "in excess of 800p per share".
"News Corp and the BSkyB Independent Directors have been unable to reach a mutually agreeable price at the current time," Murdoch's media titan said in a statement.
"However, both parties have agreed to work together to proceed with the regulatory process in order to facilitate a proposed transaction."
News Corp. currently owns 39.1% of BSkyB. The price of shares in the television business rocketed by almost 21% to 725p in early London trade.
The US group's chief operating officer Chase Carey said the offer proposed by News Corp represented a premium of 27.5% over BSkyB's average share price for the past year.
"We believe that this is the right time for BSkyB to become a wholly-owned part of News Corporation with its greater scale and broader geographic reach," he said.
"For News Corporation, our proposal presents an opportunity to consolidate a core business with which we have been closely associated for over two decades.
"News Corporation will also benefit from increasing the geographic diversification of our earnings base, reducing our exposure to cyclical advertising revenues and increasing our direct consumer subscription revenues," Carey added.
The bid for all of BSkyB comes after the British group recently posted soaring quarterly profits and data showing it was fast closing in on securing its target of 10 million paying customers in Britain.
BSkyB, in which Murdoch's News Corp is the biggest single shareholder, offers live English Premier League football, as well as telephone, Internet and High Definition (HD) television services - which give better picture quality.
News Corp. meanwhile announced on Monday that it had bought an electronic reading platform developed by Hearst and invested in a company which seeks to help news organizations make money on the Web.
The acquisition of e-reader platform Skiff from US newspaper and magazine publisher Hearst Corp and the investment in Journalism Online are the latest moves in Murdoch's campaign to get readers to pay for content online.
- AFP
