BskyB (British Sky Broadcasting), operator of the UK’s largest digital pay television platform, is set to acquire broadband networking company Easynet after its £211 million (AU$498.4 million) cash offer was unanimously recommended to the company’s shareholders by the Easynet board of directors.
The Offer represents a premium of approximately 81 percent on the closing price of 96.5 pence for each Easynet share on October 14, 2005, the last business day prior to the commencement of the offer period, and approximately 38 percent on the closing price of 127.0 pence for each Easynet share on October 20, 2005, the last business day prior to the date of the announcement that Easynet’s board had approved the deal.
BSkyB believes that the acquisition of Easynet will bring it an established presence in UK broadband; a leading position in Local Loop Unbundling in the UK with 232 local exchanges unbundled; managerial and technical expertise to expand this local infrastructure through the unbundling of additional exchanges and ownership of key parts of a national network, giving it control over the quality and availability of services to customers.
It also views the acquisition as an attractive source of new revenues and new customers now that it will be involved in a fast growing segment of the UK communications sector as a result of the purchase. The number of UK broadband connections increased from approximately 4.4 million to 8.1 million in the twelve months to 30 June 2005 - an increase of 86 percent - and is projected to continue to grow further in the future.
Commenting on the offer, BSkyB’s chief executive, James Murdoch, said: “Today’s offer reflects the exciting opportunities that now exist to combine quality entertainment with significant high-speed connections. Easynet’s innovative network and technological expertise perfectly complement Sky’s strengths in programming and in making technologies easy to use. We see value for families in moving well beyond just another triple play to offer a new level of connected entertainment and communications services.”
Easynet’s chief executive, David Rowe, said: “We believe that this offer is in the interests of Easynet’s shareholders, customers and employees. This is a great opportunity to accelerate Easynet’s local loop footprint, capture market share for next generation broadband services and support new and existing corporate and public sector customers.”
