Five years after a phone hacking scandal at one of Murdoch’s tabloid newspapers derailed a previous bid to take full control of the European pay-TV firm, the family decided the time was right to try again, convinced that a deal would enable them to better take on the likes of Netflix.
“We had been on bid alert due to the fall in the pound and we’d been preparing for this for months, or even years, ever since the last bid failed,” a person familiar with the situation said, in reference to the fall in sterling following the British vote to leave the EU. “We knew they needed to be prepared.”
With James Murdoch both the chairman of Sky and the CEO of Fox, it fell to Gilbert to push for the best deal for Sky’s independent shareholders. According to the source, Gilbert was told that Fox had three options. They could sell their stake, and potentially attract a rival takeover, they could maneuver to buy the rest of the firm at a low-ball offer or they could negotiate on price in return for Gilbert’s support.
With Gilbert agreeing to talks, the focus moved to London where both sides engaged in a frantic round of meetings to haggle over the price the Murdochs needed to pay to unite their empire across two continents. In meetings near the fashionable King’s Road, at Sky’s offices and in the premises of their advisers and lawyers, Fox agreed to increase its offer three times before both sides settled on the 10.75 pounds per share offer.
As the talks ran into the weekend the normal Sunday British roast dinner was skipped in favor a simple lunch and afternoon tea. Sunday was spent at the offices of Sky’s advisers PJT Partners while the teams moved to the premises of lawyers Herbert Smith for the final 24 hours before the deal was sealed. Fox, a second source said, knew they had to get the price right as a leak just two days after the New York meeting alarmed some Sky shareholders who said the firm was being sold off too cheaply.