Takeover bid for Easynet
Easynet, the internet service provider, confirmed yesterday an approach by an unnamed bidder, widely believed to be BSkyB.
When the London Stock Exchange opened, Easynet’s shares leaped 25 per cent on the news.
The broadband operator is believed to be close to a deal with the Murdoch empire, for an offer price around £150m.
It is thought that BSkyB approached Easynet last week and talks are said to be “serious”. A deal is expected within weeks.
Easynet said in its statement that another announcement would follow soon.
Satellite broadcaster BSkyB, which is 37 per cent owned by Rupert Murdoch’s News Corp, has said that it intends to raise around £1bn of debt through a bond issue with a view to making new acquisitions.
The addition of Easynet would allow BSkyB to offer the so-called “triple play” of home entertainment services – broadband, video on demand and telephony services, stepping up competition with merging British cable companies NTL and Telewest.
The move into broadband internet is seen by analysts as the bravest move made by BSkyB’s chief executive, who is Murdoch’s son.
James Murdoch was appointed in November 2003 despite howls of disapproval from some investors.
He and his senior M&A team are understood to have spoken to several other internet providers before settling on Easynet.
Easynet is an attractive prospect because it has invested heavily in “local loop unbundling”, putting its own equipment in BT group’s local loop exchanges. The company has its own equipment in 250 exchanges and is set to invest in 100 more. This provides higher speed connections and a wider range of services.
Easynet chief executive David Rowe stands to gain £4m for his shares if the deal goes through.
