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from Breakingviews:

Sky Europe transforms BSkyB investment case

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

“British” Sky Broadcasting is no more. The group is buying sister Sky units in Germany and Italy for at least 4.9 billion pounds ($8.3 billion) in cash from Rupert Murdoch’s Twenty-First Century Fox. That transforms the investment case for the UK’s top pay-television group.

The price looks reasonable. BSkyB will pay 2.5 billion pounds for Fox’s wholly-owned Sky Italia: 2.1 billion in cash, and the rest via a stake in the National Geographic Channel. That’s about 10 times EBITDA, and lower than many analysts feared. In Germany, BSkyB is effectively paying the market price, buying Fox’s 57.4 percent stake in Sky Deutschland for 2.9 billion pounds, and making a mandatory tender offer to outside investors at the same level, of 6.75 euros a share.

This has been mulled for years, and is in a sense a housekeeping exercise. The businesses have common branding and already collaborate on technology and productions, while executives flit from one to another. So 200 million pounds of mostly cost-based annual synergies, which BSkyB reckons have a net present value of 2 billion pounds, is punchy. The deal logic is helped by cheap debt – BSkyB is borrowing at less than 4.5 percent. Fox is also keen for cash. It wants to keep rewarding shareholders, even as it pursues Time Warner.

from Breakingviews:

UK’s strong GDP has a soft centre

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Fly the flag. The headlines will be about the solid milestone. The UK finally replanted its flag on its 2008 GDP growth peak, three years after Germany and the United States reclaimed theirs and after a mere five years of ultra-low interest rates. But the landscape – the details of the second-quarter GDP – has its uncomfortably rocky side.

from Breakingviews:

Murdoch calls on European outposts for Time Warner

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Rupert Murdoch is calling on European outposts to help in his pursuit of Time Warner. The media mogul’s Twenty-First Century Fox is poised to sell its Sky pay-TV arms in Italy and Germany to Fox’s UK affiliate British Sky Broadcasting. There’s strategic logic to the asset shuffle and the proceeds could help sweeten his $80 billion bid for the owner of CNN and Warner Bros. How Murdoch treats non-Murdoch owners is the linchpin.

from Breakingviews:

Tesco’s new chief should think the unthinkable

By Robert Cole

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tesco has a real chance at reinvention. Hiring Unilever lifer Dave Lewis to replace Phil Clarke as chief executive provides a golden opportunity for an outsider to apply radical thinking to solving the UK supermarket group’s mounting problems.

from Breakingviews:

UK banks have much to fear from latest probe

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The latest competition review of UK banking should aim to be the last. An antitrust probe in 2000 led to limited price controls after concluding that British lenders made excess profit. There were two more big investigations after the financial crisis. Yet concerns about market inefficiencies persist. That suggests the Competition and Markets Authority should do something radical this time.

from Breakingviews:

London real estate at an inflection point

By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Most real estate valuers in London think property prices in the UK capital are about to fall. That prediction has been easy to make and easier to get wrong in the last five years. This time, the evidence that global investors’ favourite housing market has peaked is looking credible.

from Hugo Dixon:

UK prepares for possible EU failure

David Cameron looks to be preparing for the possibility that his plan to renegotiate Britain’s relationship with the European Union will fail. The UK prime minister would then campaign for the country to quit the EU in a referendum he plans to hold by 2017. That seems the best way to interpret his appointment of a eurosceptic foreign minister and the nomination of a little-known former lobbyist as Britain’s European commissioner.

This is not to say that Cameron wants to take Britain out of the EU – which would be a historical mistake. It is rather that he apparently thinks quitting could be an acceptable Plan B that would keep him in his job and his Conservative party reasonably united.

from Hugo Dixon:

How to fight UK immigration fears

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

If the UK leaves the European Union, the main reason will probably be because people fear immigrants are overrunning the country. The best way of assuaging these concerns is to show how free movement of people within the EU benefits the economy and society overall, while acknowledging that some groups may be harmed and working hard to improve their lot.

from Breakingviews:

Imperial prepares $7 bln gamble

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investors think Imperial Tobacco has much to gain from a possible $56 billion merger of U.S. peers Reynolds American and Lorillard. The combination would require a large disposal programme to assuage antitrust regulators, and these forced sales could present bargains for the UK cigarette maker. The snag is that Imperial is short of cash – and the assets available may not be that attractive.

from Hugo Dixon:

EU would also be harmed by Brexit

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

It is not just Britain which would be damaged if it quit the European Union. So would other members. Jean-Claude Juncker’s nomination as Commission president at last Friday’s summit increases the chance of Brexit - Britain’s exit from the EU. Leaders from all countries now need to work to limit the risk it happens.

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