Twenty-First Century Fox Inc (NASDAQ:FOX) $9B Deal Is Brilliant: Ed Lee

In its popular programming segment, “In The Loop,” Ed Lee of Bloomberg TV analyzed Rupert Murdoch-led Twenty-First Century Fox Inc (NASDAQ:FOX)’s announcement that it has entered into agreements to sell part of its European Pay TV investments to British Sky Broadcasting Ltd (BSkyB) for a $9 billion, and how this move is going to increase the maneuvrability of Mr. Murdoch in consolidating his assets and concentrate on successfully buying out Time Warner Inc (NYSE:TWX).

Mr. Lee described the decision of Twenty-First Century Fox Inc (NASDAQ:FOX) to sell part of its European business to British Sky Broadcasting Ltd as “a brilliant move” since the New York based media giant already owns 39 percent of the Isleworth, U.K based firm. He went on to explain that, the BSkyB deal will allow Mr. Murdoch to “raise more cash and consolidate his assets.

Providing a perspective to the latest move by Twenty-First Century Fox Inc (NASDAQ:FOX), Mr. Lee indicated:

“It is almost a stop gap measure to his original plan. He wanted to buy out the rest of (BSkyB). This was at least two years ago that he wanted to try to do that. Of course the hacking scandal erected around the same time. And because of the political fallout from that, he stepped off his plan to buyout of BSkyB. So he is now doing this other thing of consolidating assets.”

Ed Lee then went on to discuss how the net $7 billion after taxes that Twenty-First Century Fox Inc (NASDAQ:FOX) will be spent. He referred to the company press release to point that, “They stressed we are going to continue the whole share buyback program that they have been doing. They buyback about $4 billion a year, on average. They are doing that and are to accelerate that likely”.

He then went on to speculate that in the event of Time Warner Inc (NYSE:TWX) deal gets done; they can raise more cash to the tune of $4 to $6 billion by selling off their investments in CNN.

Disclosure: none