May 10] British Sky Broadcasting (Sky) said Wednesday it had agreed to buy Sports Internet Group plc in an all-share deal that values the company at over £300 million ($460 million).
Shareholding directors of Sports Internet have given irrevocable undertakings to accept Sky’s offer, ensuring that Sky can acquire at least 51.5 per cent of the share capital, giving it control of the company.
With the acquisition comes an experienced management team who are expected to take Sky’s sports channel Skysports.com through the next stages of its development.
Sky also announced its latest set of figures Wednesday, showing a steep drop in operating profit for the nine-month period to end March, down to £51 million ($78 million) from £153 million ($234 million) for the same period last year. Overall, the group made a pre-tax loss of £90 million ($138 million), blaming the poor results on the high cost of acquiring subscribers.
Tony Ball, Sky’s chief executive, said his company had attracted an additional 2.3 million subscribers to the Sky digital platform, making it the fastest digital launch by any European platform. He was bullish, too, about the takeover of Sports Internet, pointing what he called its “excellent range of quality on-line activities.”
“The businesses and the impressive management provide a terrific fit for Sky and I have every confidence that we will continue to occupy a leading position in the broadband era,” said Ball.
Ball said that two-thirds of Sky’s subscribers are now digital, with full access to e-mail and interactive services.
Sky, which early in March announced a five-year agreement to manage the online business of London football club Tottenham Hotspur plc, is steadily building its online sports capabilities. Much of its success in satellite broadcasting has been the result of capturing the broadcasting rights to major sporting events, and it clearly plans to be an equally tough competitor online.
Sports Internet Group is listed on AIM, the Alternative Investment Market of the London Stock Exchange.
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