BSkyB's results to highlight pressure on News Corp
BSkyB is set to post a near 25% jump in first-half adjusted operating profit on Thursday, underlining the danger to News Corp of any delay in negotiating its USD 12.5 billion bid offer.
January 27, 2011 / 15:43 IST
BSkyB is set to post a near 25% jump in first-half adjusted operating profit on Thursday, underlining the danger to News Corp of any delay in negotiating its USD 12.5 billion bid offer.
BSkyB, which will report first-half financial results at 0700 GMT, has been adding new customers and selling new products to existing subscribers at a heady rate.It is also starting to reap the benefits of a heavy investment programme, efficiency savings and its move to buy out the firm which makes many of its set-top boxes.News Corp has offered to buy the 61% of BSkyB it does not already own to consolidate a business it helped build but now needs to allay concerns the deal will not give too much control over public opinion to Rupert Murdoch.The government is considering unspecified proposals put forward by News Corp to alleviate competition concerns before deciding whether to refer the proposed deal for a full, six-month competition inquiry.London brokerage Numis raised its price target on BSkyB last week, because it expects the takeover to be further delayed by a referral to the Competition Commission. As BSkyB consistently posts strong results, analysts say the pressure will only increase for News Corp to up its bid.Analysts expect first-half adjusted operating profit to be around 500 million pounds (USD 794.4 million), compared with 401 million pounds last year, while revenues are seen 8% higher at 3.13 billion pounds, according to a Reuters poll.It is expected to have added 154,000 net new subscribers in the second quarter, who were on average paying a new record of 525 pounds per year. The growth is likely to have been boosted by demand for high definition TV services and broadband.News Corp has offered to pay 700 pence per share for BSkyB but the Sky independent directors are looking for above 800 pence. The company dominates Britain's pay-TV market with 10 million customers due mainly to its sports and movie offerings.BSkyB has declined to comment on the takeover situation at recent results, other than to say the firm will continue with "business as usual". Its shares closed at 755 pence on Wednesday, valuing the whole firm at 13.2 billion pounds. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
