FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of December, 2006
15 December, 2006
BRITISH SKY BROADCASTING GROUP PLC
(Name of Registrant)
Grant Way, Isleworth, Middlesex, TW7 5QD England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not Applicable
EXHIBIT INDEX
Exhibit
EXHIBIT NO.1 Press release of British Sky Broadcasting Group plc
announcing Press Announcement released on 15 December, 2006
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE TO
DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
RECOMMENDED CASH OFFER
by
SKY HOLDINGS LIMITED
a wholly-owned subsidiary of
BRITISH SKY BROADCASTING GROUP PLC
for
365 MEDIA GROUP PLC
Summary
* The Boards of Sky Holdings and 365 Media are pleased to announce today that
they have agreed the terms of a recommended cash offer, to be made by Sky
Holdings, a wholly-owned subsidiary of Sky, for the entire issued and to be
issued share capital of 365 Media.
* The Offer is 68 pence in cash for each 365 Media Share, valuing the entire
issued share capital of 365 Media at approximately GBP96 million and the
fully diluted share capital of 365 Media at approximately GBP103 million.
* The Offer represents a premium of approximately:
- 23 per cent. to the Closing Price of 55.5 pence for each 365 Media
Share on 4 October 2006, the last dealing day prior to the
commencement of the offer period
- 6 per cent. to the Closing Price of 64 pence for each 365 Media Share
on 14 December 2006, the last dealing day prior to the date of this
announcement.
* As an alternative to all or some of the cash consideration of 68 pence per
365 Media Share, holders of 365 Media Shares (other than Restricted Overseas
Persons) who validly accept the Offer may elect to receive Loan Notes on the
basis of GBP1 nominal of Loan Notes for every GBP1 cash consideration.
The 365 Media Directors, who have been so advised by UBS, consider the terms of
the Offer to be fair and reasonable. In providing advice to the 365 Media
Directors, UBS has taken into account the commercial assessments of the 365
Media Directors. Accordingly, the Board of 365 Media intends to unanimously
recommend that 365 Media Shareholders accept the Offer, as the 365 Media
Directors have irrevocably undertaken to do (or procure to be done) in respect
of their own beneficial interests and holdings.
Sky Holdings has received irrevocable undertakings to accept the Offer from the
365 Media Directors and certain other 365 Media Shareholders in respect of, in
aggregate, 43,497,498 shares in 365 Media, representing approximately 30.7 per
cent. of the issued share capital of 365 Media. Further details of the
irrevocable undertakings are set out in Appendix II.
The acquisition of 365 Media enhances Sky's existing online strategy, adding to
its portfolio of online assets and increasing its exposure to high growth
revenue streams. The acquisition of 365 Media will bring Sky:
* an extensive portfolio of websites, including TEAMtalk.com,
SportingLife.com, Planet-Rugby.com, PlanetF1.com, Football365.com,
Golf365.com, Rivals.net and Cricket365.com. These sites cover a wide
range of sports and their differentiated style and branding makes
them complementary to Sky Sports' existing websites. 365 Media's
websites have:
- over 9 million monthly users
- user bases and brands developed over several years
- a strong community element which Sky believes represents an
area of significant opportunity
- mobile distribution deals for content which support Sky's
multi-platform approach to delivery
* greater presence in the UK's online sector, leading to improved
exposure to the fastest growing segment of the UK's advertising
market; according to the Internet Advertising Bureau, UK online
advertising revenue grew by 40 per cent. in the first six months of
2006
* a broader platform to promote Sky's gaming and betting activities as
well as Sky's other sports related offerings
* over 60,000 additional betting and gaming customers
* a profitable business, which recorded a 16 per cent. year on year
increase in gross profit for the six months ended 30 June 2006
* a positive net cash balance; 365 Media reported net funds of GBP12
million as at 30 June 2006.
The acquisition by Sky of 365 Media is expected to result in significant
synergies relative to current profitability of the 365 Media business, including
marketing efficiencies and the consolidation of supply arrangements for sports
news. In consequence, the acquisition is currently expected to:
* immediately enhance earnings before integration costs
* be neutral to earnings after integration costs in the financial year
to 30 June 2007
* generate returns at a rate in excess of Sky's cost of capital within
three years (post tax and integration costs)
* deliver an internal rate of return in excess of 20 per cent.
The Offer Document and Form of Acceptance are being posted today to 365 Media
Shareholders (and, for information only, to 365 Media Optionholders), although
the Offer is not being made, directly or indirectly, in or into the United
States, Canada, Australia or Japan. Copies of the Offer Document and the Form of
Acceptance are available from Lloyds TSB Registrars at 3rd Floor, Princess
House, 1 Suffolk Lane, London EC4R 0AX and from Lazard at 50 Stratton Street,
London W1J 8LL.
Commenting on the Offer, Sky's Chief Financial Officer, Jeremy Darroch, said:
"The acquisition of 365 Media will contribute to Sky's aim of being a leading
provider of online sports and gaming services. Bringing together 365 Media's
extensive network of sports and gaming websites with our own Sky Sports and
SkyBet businesses will allow us to reach a broader audience. This will give us
greater presence in online advertising and will position us to take full
advantage of growing opportunities in gaming. This combination moves forward our
strategy of serving customers with high quality content and services across
multiple platforms."
Commenting on the Offer, 365 Media's Executive Chairman, Peter Dubens, said:
"Since the admission of 365 Media to AIM in August 2001, we have created a
significant player in sports websites and online gaming. We acquired extremely
good online brands in the aftermath of the dotcom crash, including websites such
as Planet-Rugby.com, Football365.com, SportingLife.com, TEAMtalk.com and
Cricket365.com and an odds comparison website (Oddschecker.com). We are now one
of the largest online sports networks in Europe, attracting over 9 million
discerning and dedicated sports fans per month to our network of websites.
Through a strategy of acquisitions combined with organic growth, the market
capitalisation of the business has increased from GBP7.55 million on our
admission to AIM in August 2001 to GBP96 million at the Offer Price and I
believe this Offer recognises the value of the company which has been carefully
and prudently created in the last five years."
Commenting on the Offer, 365 Media's Chief Executive Officer, Eric Semel, said:
"365 Media has grown from a small online sports book into a substantial online
presence across Europe, with a broad reach of online gaming and betting products
together with a network of leading online sports brands. I would like to thank
all the staff who have contributed to creating the company as it now stands,
without whom it would not have been possible."
ENQUIRIES
Sky
Analysts / Investors:
Andrew Griffith
Robert Kingston
+44 (0)20 7705 3000
Press:
Robert Fraser
+44 (0)20 7705 3000
Lazard & Co., Limited (Financial Adviser to Sky)
Peter Warner
Sarah Carter
+44 (0)20 7187 2000
Merrill Lynch International (Broker to Sky)
Mark Astaire
Peter Brown
+44 (0)20 7628 1000
Finsbury
Alice Macandrew
Guy Lamming
+44 (0)20 7251 3801
365 Media
Peter Dubens, Executive Chairman
+44 (0)20 7766 6909
UBS Investment Bank (Financial Adviser to 365 Media)
Jason Katz
Jonathan Evans
+44 (0)20 7567 8000
Financial Dynamics
Edward Bridges
Juliet Clarke
Hannah Sloane
+44 (0)20 7831 3113
This summary should be read in conjunction with, and is subject to, the full
text of this announcement. Terms used in this summary shall have the meaning
given to them in the full announcement.
The conditions to which the Offer is subject are set out in Appendix I to this
announcement. Appendix III to this announcement contains definitions of certain
expressions used in this announcement.
For further information on Sky and 365 Media, please see www.sky.com and
www.365mediagroup.co.uk, respectively.
This announcement does not constitute, or form part of, an offer or solicitation
of any offer to sell or an invitation to purchase any securities or the
solicitation of an offer to buy any securities, pursuant to the Offer or
otherwise. The Offer is being made solely by the Offer Document and the Form of
Acceptance, which contain the full terms and conditions of the Offer, including
details of how the Offer may be accepted. Any acceptance or other response to
the Offer should be made on the basis of the information contained in the Offer
Document and Form of Acceptance.
The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of the relevant jurisdictions in which they
are located. In particular, as described in Appendix I, the Offer will not be
made directly or indirectly into the United States, Canada, Australia or Japan.
Persons who are not resident in the United Kingdom should inform themselves
about, and observe, any applicable legal or regulatory requirements.
Unless permitted by applicable law and regulation, the Offer is not being, and
will not be, made, directly or indirectly, in or into, or by the use of the
mails of, or by any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of interstate or foreign
commerce of, or by any facilities of a national securities exchange of, the
United States, Canada, Australia or Japan and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facility or from within
the United States, Canada, Australia or Japan. Accordingly, copies of this
announcement and any other documents related to the Offer are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded, distributed
or sent in, into or from the United States, Canada, Australia or Japan, and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise distribute or send such documents in, into or from
such jurisdictions as doing so may invalidate any purported acceptance of the
Offer.
The Loan Notes that may be issued pursuant to the Offer are not, and will not
be, registered under the US Securities Act or under the relevant securities laws
of any state, district or other jurisdiction of the United States. Accordingly,
Loan Notes may not be offered, sold, resold or delivered, directly or
indirectly, in, into or from the United States (or to any residents thereof) if
to do so would constitute a violation of the relevant laws of such jurisdiction.
In addition, the relevant clearances and registrations have not been, and will
not be, sought to enable the Loan Notes to be offered in compliance with the
applicable securities laws of Canada, Australia or Japan (or any province or
territory thereof, if applicable) or any other jurisdiction if to do so would
constitute a violation of the relevant laws of such jurisdiction. Accordingly,
Loan Notes may not be offered, sold, resold or delivered, directly or
indirectly, in, into or from Canada, Australia or Japan (or to any residents
thereof) or any other jurisdiction (or to residents in that jurisdiction) if to
do so would constitute a violation of the relevant laws of such jurisdiction.
Further details in relation to overseas shareholders are contained in the Offer
Document.
This announcement contains certain forward-looking statements, including
statements regarding Sky Holdings' plans, objectives and expected performance.
Such statements relate to events and depend on circumstances that will occur in
the future and are subject to risks, uncertainties and assumptions. There are a
number of factors which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements,
including, among others, the enactment of legislation or regulation that may
impose costs or restrict activities; the re-negotiation of contracts or
licences; fluctuations in demand and pricing in the media industry; fluctuations
in exchange controls; changes in government policy and taxations; industrial
disputes; war and terrorism. These forward-looking statements speak only as at
the date of this document.
Rule 8 Disclosures
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1% or more of any class of "relevant
securities" of 365 Media, all "dealings" in any "relevant securities" of 365
Media by such person (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of 365 Media, they will be deemed to be a single person for the
purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all dealings in "relevant
securities" of 365 Media, by Sky Holdings or 365 Media or by any of their
respective "associates" (within the meaning of the Code), must be disclosed no
later than 12.00 noon (London time) on the business day following the date of
the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website.
If you are in doubt as to the application of Rule 8 to you, please contact an
independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel by telephone (+44 (0)20 7638 0129) or by fax (+44 (0)20 7236
7013).
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively as financial adviser to Sky and Sky
Holdings and no one else in connection with the Offer and this announcement and
will not be responsible to anyone other than Sky and Sky Holdings for providing
the protections afforded to clients of Lazard nor for providing advice in
connection with the Offer or this announcement or any matter referred to in this
announcement.
Merrill Lynch, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively as broker to Sky and Sky
Holdings and no one else in connection with the Offer and this announcement and
will not be responsible to anyone other than Sky and Sky Holdings for providing
the protections afforded to clients of Merrill Lynch nor for providing advice in
connection with the Offer or this announcement or any matter referred to in this
announcement.
UBS is acting exclusively as financial adviser to 365 Media and no one else in
connection with the Offer and this announcement and will not be responsible to
anyone other than 365 Media for providing the protections afforded to clients of
UBS nor for providing advice in connection with the Offer or this announcement
or any matter referred to in this announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE TO
DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
RECOMMENDED CASH OFFER
by
SKY HOLDINGS LIMITED
a wholly-owned subsidiary of
BRITISH SKY BROADCASTING GROUP PLC
for
365 MEDIA GROUP PLC
1. Introduction
The Boards of Sky Holdings and 365 Media announced today the terms of
a recommended cash offer, to be made by Sky Holdings, a wholly-owned
subsidiary of Sky, for the entire issued and to be issued ordinary
share capital of 365 Media.
2. The Offer
The Offer, which is on the terms and conditions set out in Appendix I
to this announcement and is subject to the further terms set out in
the Offer Document and the Form of Acceptance, is being made on the
following basis:
for each 365 Media Share 68 pence in cash
The Offer values the entire issued share capital of 365 Media at
approximately GBP96 million.
The Offer represents a premium of approximately 23 per cent. to the
Closing Price of 55.5 pence for each 365 Media Share on 4 October
2006, the last dealing day prior to the commencement of the offer
period, and a premium of approximately 6 per cent. to the Closing
Price of 64 pence for each 365 Media Share on 14 December 2006, the
last dealing day prior to the date of this announcement.
The Offer values the fully diluted share capital of 365 Media at
approximately GBP103 million assuming full exercise of all outstanding
options under the 365 Media Share Option Schemes and of all other
subscription rights. This is based on 141,809,292 shares in 365 Media
in issue at the date of this announcement and 10,162,104 shares in 365
Media which are the subject of options or subscription rights,
including options under the 365 Media Share Option Schemes.
3. The Loan Note Alternative
As an alternative to all or part of the cash consideration to which
they would otherwise be entitled under the Offer, accepting 365 Media
Shareholders, other than Restricted Overseas Persons, will, subject to
the conditions and further terms set out in the Offer Document and the
Form of Acceptance, be entitled to elect to receive Loan Notes to be
issued by Sky Holdings on the following basis:
for each GBP1 of cash consideration GBP1 nominal of Loan Notes
The Loan Notes will be issued by Sky Holdings, credited as fully paid,
in amounts and integral multiples of GBP1 and the balance of any
entitlement that is not a whole multiple of GBP1 will be disregarded
and not issued. The Loan Notes will constitute direct, unsecured and
unsubordinated obligations of Sky Holdings and will be guaranteed as
to payment of principal and interest by The Royal Bank of Scotland
plc. The Loan Notes will bear interest at a rate of 1 per cent. below
twelve-month sterling LIBOR to be determined on the first business day
of each interest period. Interest will be payable by yearly
instalments in arrears (less any tax where deduction thereof is
required by law) on 31 December in each year up to and including 31
December 2009 (each an "interest payment date"). The first payment of
interest will be made on the First Payment Date. On the First Payment
Date, interest will be paid in respect of the period from (and
including) the date of issue of the relevant Loan Notes to (but
excluding) the First Payment Date. The Loan Notes will be redeemable,
on not less than 14 days' notice, in whole for cash at par at the
option of noteholders on a date being either 30 June or 31 December in
any year between the first date on which all of the relevant holding
of Loan Notes has been in issue for more than six months and 31
December 2009 (both dates inclusive) (a "redemption date").
Unless Sky Holdings decides otherwise, no Loan Notes will be issued by
Sky Holdings unless the aggregate nominal value of all Loan Notes to
be issued as a result of valid elections for the Loan Note Alternative
exceeds GBP5 million. If such aggregate nominal value is less than
GBP5 million, any such election shall, unless Sky Holdings decides
otherwise, be void and the relevant 365 Media Shareholders will be
deemed to have elected for cash. Sky Holdings may redeem all (but not
some only) of the Loan Notes (so long as they have all been in issue
for at least 6 months) if at any time less than GBP5 million of the
Loan Notes remains outstanding. Sky Holdings may purchase any Loan
Notes which have been in issue for more than 6 months at a price by
tender available to all holders of Loan Notes alike, or otherwise by
agreement with any holders of Loan Notes. The Loan Notes may be
redeemed in accordance with their terms. If not previously redeemed,
the final redemption date will be 31 December 2009. Any Loan Notes
outstanding on the final redemption date will be redeemed at par
together with any accrued interest (less any tax where deduction
thereof is required by law) on that date. In relation to any
redemption date falling on or after the first anniversary of the date
of issue of each of the relevant Loan Notes, the Loan Notes may be
redeemed, at the option of the holder or the issuer, in US dollars.
The Loan Notes will not be transferable (other than by a noteholder to
a spouse/civil partner, parent, child, certain family members or a
family trust of any of them) and no application will be made for them
to be listed on, or dealt on, any stock exchange or other trading
facility.
The Loan Notes that may be issued in connection with the Offer are not
and will not be registered under the US Securities Act or under the
relevant securities laws of any state, district or other jurisdiction
of the United States. Accordingly, Loan Notes may not be offered,
sold, resold or delivered, directly or indirectly, in, into or from
the United States (or to any residents thereof) if to do so would
constitute a violation of the relevant laws of such jurisdiction.
In addition, the relevant clearances and registrations have not been,
and will not be, sought or obtained, nor have any steps been taken,
nor will any steps be taken, to enable the Loan Notes to be publicly
offered in compliance with applicable securities laws of Australia,
Canada or Japan (or any province or territory thereof, if applicable)
or any other jurisdiction. Accordingly, the Loan Notes may not be
offered, sold, resold or delivered, directly or indirectly, in, into
or from Australia, Canada or Japan (or to any residents thereof) or
any other jurisdiction (or to any residents in that jurisdiction) if
to do so would constitute a violation of the relevant laws of that
jurisdiction.
The Loan Note Alternative is conditional upon the Offer becoming or
being declared unconditional in all respects. The Loan Note
Alternative will remain open for acceptance for as long as the Offer
remains open for acceptance.
Merrill Lynch has advised that, based on market conditions on 14
December 2006 (being the latest practicable date prior to this
announcement), in its opinion the value of the Loan Notes (if the Loan
Notes had then been in issue) would have been not less than 99 pence
per GBP1 nominal value.
Further details of the Loan Notes are contained in the Offer Document.
4. Terms and Conditions of the Offer
365 Media Shares will be acquired pursuant to the Offer fully paid and
free from all liens, equities, charges, encumbrances, rights of
pre-emption and any other third party rights or interests of any
nature whatsoever and together with all rights now or hereafter
attaching thereto, including voting rights and, without limitation,
the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of
this announcement. The conditions and certain further terms of the
Offer are set out or referred to in Appendix I.
5. Recommendation
The 365 Media Directors, who have been so advised by UBS, consider the
terms of the Offer to be fair and reasonable. In providing advice to
the 365 Media Directors, UBS has taken into account the commercial
assessments of the 365 Media Directors. Accordingly, the Board of 365
Media intends to unanimously recommend that 365 Media Shareholders
accept the Offer, as the 365 Media Directors have irrevocably
undertaken to do (or procure to be done) in respect of their own
beneficial interests and holdings.
6. Irrevocable undertakings
Sky Holdings has received irrevocable undertakings to accept (or
procure the acceptance of) the Offer from the 365 Media Directors in
respect of their entire beneficial shareholdings amounting to, in
aggregate, 23,562,337 shares in 365 Media, representing approximately
16.6 per cent. of the issued share capital of 365 Media. These
undertakings to accept the Offer are also binding in the event of a
competing offer being made for 365 Media.
Sky Holdings has also received irrevocable undertakings to accept (or
procure the acceptance of) the Offer from certain other 365 Media
Shareholders as follows:
365 Media Shareholder Approximate number Approximate percentage of
providing irrevocable of 365 Media Shares 365 Media Shares in issue
undertaking
ENIC Gaming Limited 12,000,000 8.5
Centrecourt Ventures Inc 990,777 0.7
UBS Global Asset Management 4,502,184 3.2
(UK) Ltd
The Conversion Master Fund 2,442,200 1.7
Limited
Total: 19,935,161 14.1
The undertakings to accept the Offer from ENIC Gaming Limited and
Centrecourt Ventures Inc are also binding in the event of a competing
offer being made for 365 Media. The undertaking to accept the Offer
from UBS Global Asset Management (UK) Limited will cease to be binding
if an offer is announced the value of which is five per cent. or more
per 365 Media Share greater than the Offer. The undertaking to accept
the Offer from The Conversion Master Fund Limited will cease to be
binding if any higher offer is announced.
Accordingly, Sky Holdings has received irrevocable undertakings to
accept (or procure the acceptance of) the Offer in respect of, in
aggregate, 43,497,498 shares in 365 Media, representing approximately
30.7 per cent. of the issued share capital of 365 Media.
Further details of the irrevocable undertakings are set out in
Appendix II.
7. Background to and reasons for recommendation of the Offer
Since 365 Media's admission to AIM in August 2001 at a price of 25
pence per share, 365 Media has delivered significant value for
shareholders. The management team has successfully developed the
business, both organically and through a series of acquisitions,
creating a network of leading online sports brands and integrating
these with the online gaming business. This has culminated in the
recent decision by the Board to change the company name to 365 Media
Group plc, which better reflects the core activities and value of the
365 Media Group.
Whilst the Board of 365 Media believes that the current business model
will grow in strength and value, the Board of 365 Media believes that
the terms of the Offer represent an attractive opportunity for 365
Media Shareholders to realise their investment for cash today at a
premium to the prevailing share price. Accordingly, the Board of 365
Media intends unanimously to recommend the transaction to
shareholders.
8. Background to and reasons for the Offer
Sky's strategy includes the expansion of its range of online products
and services as part of its aim of increasing choice and giving
control to its customers. 2006 has already seen the successful
launches of Sky Broadband and Sky Anytime as well as the announcement
by Sky of a broadband alliance with Google. The UK online sector is
growing fast and is forecast to account for a much greater share of
advertising revenue in the future than it does today.
Through the acquisition of 365 Media, Sky will gain access to an
extensive network of sports websites which cover all major sports and
have particularly strong community features. The 365 Media sports
websites have over 9 million monthly users and have developed a loyal
user base over several years of operation. The 365 Media portfolio
provides access to brands and user experiences that differ from Sky
Sports' existing offering and are therefore highly complementary to
Sky's existing sports websites. The acquisition supports Sky's
strategy of providing a content rich experience for its customers
across a range of media including on television, the Internet and on
mobile devices.
The 365 Media sports websites will provide an enhanced platform to
promote the enlarged group's gaming and betting activities as well as
Sky's other offerings aimed at the sports fan including Sky's sports
channels and Sky's HD product. 365 Media has already been successful
in channelling traffic from its sports websites to its betting and
gaming business.
Sky currently operates a gaming and betting business, SkyBet. The
addition of 365 Media's gaming and betting customers will be of value
to SkyBet, which is already growing strongly and reported a 43 per
cent. increase in revenue for the three months ended 30 September 2006
compared to the same period in 2005. 365 Media's gaming division
reported operating profit of GBP0.3 million for the six months ended
30 June 2006.
9. Information on Sky
The BSkyB Group currently owns, operates and distributes 18 television
channels including Sky One, Sky Sports, Sky News and Sky Movies. In
addition, the BSkyB Group currently retails 128 third party television
channels and holds equity interests in a number of joint venture
channels.
At 30 September 2006, there were approximately 8,258,000 DTH
subscribers to the BSkyB Group television service, and approximately
3,857,000 subscribers to the cable operators to whom the BSkyB Group
supplies certain of its channels, in the UK and Ireland.
In its audited accounts for the year ended 30 June 2006, the BSkyB
Group reported turnover of GBP4,148 million and profit on ordinary
activities before taxation of GBP798 million. Sky reports fixed odds
betting revenue as the total amounts staked by customers less customer
winnings. As at 30 June 2006, the BSkyB Group had net assets of GBP121
million.
Sky Holdings is a wholly-owned subsidiary of Sky. In January 2006, Sky
Holdings acquired Easynet Group plc for an aggregate cash
consideration of approximately GBP211 million. In November 2006, Sky
Holdings acquired 696 million ordinary shares in ITV plc for an
aggregate cash consideration of approximately GBP940 million.
10. Information on 365 Media
365 Media is a leading provider of sports websites and online gaming
in the UK. Since its admission to AIM in August 2001, 365 Media has
pursued an active acquisition strategy and now owns and operates 20
sports websites including Planet-Rugby.com, PlanetF1.com,
Football365.com, Golf365.com, Rivals.net, SportingLife.com,
TEAMtalk.com and Cricket365.com, an odds comparison website
(Oddschecker.com) and four wagering websites, ukbetting.com,
totalbet.com, Goldbet.com and ClubonthePark.com. 365 Media employs
over 270 people.
In the financial year ended 31 December 2005, 365 Media achieved
turnover of GBP118.8 million (2004, GBP85.6 million) and a loss on
ordinary activities before taxation of GBP1.1 million (2004, loss of
GBP6.9 million). 365 Media reports fixed odds betting revenue as the
total amounts staked by customers. For the six months to 30 June 2006,
365 Media achieved turnover of GBP62.4 million (2005, GBP55.5 million)
and a profit on ordinary activities before taxation of GBP0.2 million
(2005, loss of GBP0.4 million).
365 Media is aware that the Unlawful Internet Gambling Enforcement Act
of 2006 was passed into Federal Law in the US in October 2006, which
makes it a criminal offence to accept financial transactions to
facilitate "unlawful Internet gambling" from the US. This legislation
expressly addresses online gambling and, in combination with
pre-existing Federal Law, purports to prohibit businesses located
outside of the United States taking bets or game wagers from US
residents. The illegality of Internet betting and gaming in the US
derives, under Federal Law, from the Wire Wager Act of 1961, which
prohibits betting on any sporting event or contest over a "wire
communication" facility. Other Federal Statutes may be applicable as
well. The US authorities have taken the view that all forms of online
gambling are illegal under US law.
Prior to the new legislation, 365 Media had recognised that there were
already certain risks arising under existing US law and accordingly
has not in the past accepted bets in any form from the US. 365 Media
has put in place policies to ensure that US law is not breached in
relation to any of its online gaming and betting activities, which
include ensuring that its betting and gaming products are not
available to US residents. These policies have been, and continue to
be, strictly enforced.
365 Media acquired ukbetting.com Limited from ENIC Gaming Limited
("ENIC") in 2001. As part of the consideration for the acquisition,
365 Media agreed to pay ENIC deferred consideration on the achievement
of certain turnover thresholds by ukbetting.com Limited and derived
from its client base. 365 Media and ENIC have entered into a
settlement agreement to resolve disputes relating to the level of
turnover achieved, pursuant to which 365 Media has agreed to pay ENIC
GBP625,000 in cash and to issue and allot 2,500,000 shares in 365
Media to ENIC by way of deferred consideration. This agreement is not
conditional upon the Offer becoming or being declared unconditional.
ENIC has also exercised a right to subscribe for 3,500,000 shares in
365 Media at a price of 25 pence per share.
11. Management and employees
Sky Holdings attaches great importance to the skills and experience of
the existing employees of 365 Media and believes that opportunities
for them will be enhanced in the event that the Offer becomes or is
declared unconditional in all respects.
Sky Holdings intends that the existing employment rights of the
management and employees of 365 Media will be safeguarded upon the
Offer becoming or being declared unconditional in all respects. Sky
Holdings has given assurances that it will honour the existing pension
rights of 365 Media employees upon the Offer becoming or being
declared unconditional in all respects.
Sky Holdings does not anticipate any adverse change in the conditions
of employment of 365 Media Group's employees nor any significant
changes to the principal locations of 365 Media Group's businesses.
The 365 Media Directors will resign as directors of 365 Media upon the
Offer becoming or being declared unconditional in all respects.
Peter Dubens and Eric Semel have indicated to Sky Holdings that, upon
the Offer becoming or being declared unconditional in all respects,
they will resign their positions as Executive Chairman and Chief
Executive Officer of 365 Media respectively but will remain as
employees of 365 Media for a fixed period to 1 July 2008 and otherwise
on materially the same terms and conditions as their existing service
contracts save that they shall cease to be entitled to their existing
remuneration and benefits and will receive a reduced salary from 365
Media commensurate with their revised duties and hours of work to be
agreed.
Sky Holdings has not taken any decision in relation to the future
involvement in the 365 Media Group's businesses of the other members
of 365 Media's senior management team following the Offer becoming or
being declared unconditional in all respects. As at the date of this
document, none of those individuals has served notice on 365 Media or
indicated their intention to do so as a consequence of the Offer. Sky
Holdings intends to hold discussions with all members of the senior
management of 365 Media regarding their future involvement in the
businesses of the 365 Media Group.
Sky Holdings does not currently anticipate that the Offer, if
successful, will have any significant adverse impact upon its own
employees.
In addition, your attention is drawn to paragraph 8 of this
announcement, which sets out details of the background to the Offer
and Sky Holdings' future strategy and intentions in respect of the
businesses of the 365 Media Group.
12. 365 Media Share Option Schemes
The Offer is being extended to any 365 Media Shares which are issued
or unconditionally allotted prior to the date on which the Offer
closes (or, subject to the Code, by such earlier date as Sky Holdings
may decide) pursuant to the exercise of options granted under the 365
Media Share Option Schemes or otherwise.
If the Offer becomes or is declared unconditional in all respects, to
the extent options remain unexercised or have not lapsed, it is
intended that Sky Holdings will in due course make appropriate
proposals to the participants in the 365 Media Share Option Schemes.
13. Financing of the Offer
The Offer will be financed from the BSkyB Group's existing cash
resources.
Lazard is satisfied that Sky Holdings has the necessary financial
resources available to satisfy full acceptance of the Offer. Full
acceptance of the Offer, assuming exercise of all outstanding options
under the 365 Media Share Option Schemes and other outstanding
subscription rights, would involve a maximum cash payment of
approximately GBP103 million.
14. Compulsory acquisition and cancellation of trading
Upon the Offer becoming or being declared unconditional in all
respects and sufficient acceptances having been received, Sky Holdings
intends to apply the provisions of sections 428 to 430F (inclusive) of
the Companies Act to acquire compulsorily the remaining 365 Media
Shares on the same terms as the Offer. If the Offer becomes or is
declared unconditional in all respects then Sky Holdings intends to
procure the making of an application by 365 Media to the London Stock
Exchange for the cancellation of the admission of 365 Media Shares to
AIM in accordance with Rule 41 of the AIM Rules. Such cancellation of
admission will take effect no earlier than 20 business days after (a)
Sky Holdings has, by virtue of its shareholding (if any) and
acceptances under the Offer, acquired or agreed to acquire 75 per
cent. of the issued share capital of 365 Media or (b) the first date
of issue of compulsory acquisition notices under section 429 of the
Companies Act. The cancellation of the admission of 365 Media Shares
to AIM will reduce the liquidity and marketability of all 365 Media
Shares in respect of which acceptances of the Offer are not submitted.
15. Offer Document and Form of Acceptance
The Offer Document and Form of Acceptance are being posted today to
365 Media Shareholders (and, for information purposes, to 365 Media
Optionholders), although the Offer is not being made, directly or
indirectly, in or into the United States, Canada, Australia or Japan.
Copies of the Offer Document and the Form of Acceptance are available
from Lloyds TSB Registrars at 3rd Floor, Princess House, 1 Suffolk
Lane, London EC4R 0AX and from Lazard at 50 Stratton Street, London
W1J 8LL.
If you are in any doubt as to the action you should take, you are
recommended to seek your own personal financial advice immediately
from your stockbroker, bank manager, solicitor, accountant or other
independent financial adviser duly authorised under the Financial
Services and Markets Act 2000 if you are resident in the United
Kingdom or, if not, from another appropriately authorised independent
financial adviser.
16. General
Neither Sky Holdings, nor any of its directors, nor to the best of Sky
Holdings' knowledge and belief, any person acting in concert with Sky
Holdings is interested in or has any rights to subscribe for any 365
Media Shares or has borrowed or lent any 365 Media Shares nor does any
such person have any short position whether conditional or absolute
and whether in the money or otherwise (including a short position
under a derivative) or any arrangement in relation to 365 Media
Shares. For these purposes "interest" includes any long economic
exposure, whether conditional or absolute, to changes in the price of
securities and a person is treated as having an "interest" by virtue
of the ownership or control of securities or by virtue of any option
(including traded options) in respect of, or derivative referenced to,
securities and "arrangement" includes any agreement to sell or any
delivery obligation or right to require another person to purchase or
take delivery of 365 Media Shares and also includes any indemnity or
option arrangement, any agreement or understanding, formal or
informal, of whatever nature relating to 365 Media Shares which may be
an inducement to deal or refrain from dealing in such securities.
ENQUIRIES
Sky
Analysts / Investors:
Andrew Griffith
Robert Kingston
+44 (0)20 7705 3000
Press:
Robert Fraser
+44 (0)20 7705 3000
Lazard & Co., Limited (Financial Adviser to Sky)
Peter Warner
Sarah Carter
+44 (0)20 7187 2000
Merrill Lynch International (Broker to Sky)
Mark Astaire
Peter Brown
+44 (0)20 7628 1000
Finsbury
Alice Macandrew
Guy Lamming
+44 (0)20 7251 3801
365 Media
Peter Dubens, Executive Chairman
+44 (0)20 7766 6909
UBS Investment Bank (Financial Adviser to 365 Media)
Jason Katz
Jonathan Evans
+44 (0)20 7567 8000
Financial Dynamics
Edward Bridges
Juliet Clarke
Hannah Sloane
+44 (0)20 7831 3113
The conditions to which the Offer is subject are set out in Appendix I to this
announcement. Appendix III to this announcement contains definitions of certain
expressions used in this announcement.
For further information on Sky and 365 Media, please see www.sky.com and
www.365mediagroup.co.uk, respectively.
This announcement does not constitute, or form part of, an offer or solicitation
of any offer to sell or an invitation to purchase any securities or the
solicitation of an offer to buy any securities, pursuant to the Offer or
otherwise. The Offer is being made solely by the Offer Document and the Form of
Acceptance, which contain the full terms and conditions of the Offer, including
details of how the Offer may be accepted. Any acceptance or other response to
the Offer should be made on the basis of the information contained in the Offer
Document and Form of Acceptance.
The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of the relevant jurisdictions in which they
are located. In particular, as described in Appendix I, the Offer will not be
made directly or indirectly into the United States, Canada, Australia or Japan.
Persons who are not resident in the United Kingdom should inform themselves
about, and observe, any applicable legal or regulatory requirements.
Unless permitted by applicable law and regulation, the Offer is not being, and
will not be, made, directly or indirectly, in or into, or by the use of the
mails of, or by any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of interstate or foreign
commerce of, or by any facilities of a national securities exchange of, the
United States, Canada, Australia or Japan and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facility or from within
the United States, Canada, Australia or Japan. Accordingly, copies of this
announcement and any other documents related to the Offer are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded, distributed
or sent in, into or from the United States, Canada, Australia or Japan, and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise distribute or send such documents in, into or from
such jurisdictions as doing so may invalidate any purported acceptance of the
Offer.
The Loan Notes that may be issued pursuant to the Offer are not, and will not
be, registered under the US Securities Act or under the relevant securities laws
of any state, district or other jurisdiction of the United States. Accordingly,
Loan Notes may not be offered, sold or resold in, into or from the United States
(or to any residents thereof) if to do so would constitute a violation of the
relevant laws of such jurisdiction. In addition, the relevant clearances and
registrations have not been, and will not be, sought to enable the Loan Notes to
be offered in compliance with the applicable securities laws of Canada,
Australia or Japan (or any province or territory thereof, if applicable) or any
other jurisdiction if to do so would constitute a violation of the relevant laws
of such jurisdiction. Accordingly, Loan Notes may not be offered, sold, resold
or delivered, directly or indirectly, in, into or from Canada, Australia or
Japan (or to any resident thereof) or any other jurisdiction (or to residents in
that jurisdiction) if to do so would constitute a violation of the relevant laws
of such jurisdiction.
Further details in relation to overseas shareholders are contained in the Offer
Document.
This announcement contains certain forward-looking statements, including
statements regarding Sky Holdings' plans, objectives and expected performance.
Such statements relate to events and depend on circumstances that will occur in
the future and are subject to risks, uncertainties and assumptions. There are a
number of factors which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements,
including, among others, the enactment of legislation or regulation that may
impose costs or restrict activities; the re-negotiation of contracts or
licences; fluctuations in demand and pricing in the media industry; fluctuations
in exchange controls; changes in government policy and taxations; industrial
disputes; war and terrorism. These forward-looking statements speak only as at
the date of this document.
Rule 8 Disclosures
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1% or more of any class of "relevant
securities" of 365 Media, all "dealings" in any "relevant securities" of 365
Media by such person (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of 365 Media, they will be deemed to be a single person for the
purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all dealings in "relevant
securities" of 365 Media, by Sky Holdings or 365 Media or by any of their
respective "associates" (within the meaning of the Code), must be disclosed no
later than 12.00 noon (London time) on the business day following the date of
the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website.
If you are in doubt as to the application of Rule 8 to you, please contact an
independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel by telephone (+44 (0)20 7638 0129) or by fax (+44 (0)20 7236
7013).
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively as financial adviser to Sky and Sky
Holdings and no one else in connection with the Offer and this announcement and
will not be responsible to anyone other than Sky and Sky Holdings for providing
the protections afforded to clients of Lazard nor for providing advice in
connection with the Offer or this announcement or any matter referred to in this
announcement.
Merrill Lynch, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively as broker to Sky and Sky
Holdings and no one else in connection with the Offer and this announcement and
will not be responsible to anyone other than Sky and Sky Holdings for providing
the protections afforded to clients of Merrill Lynch nor for providing advice in
connection with the Offer or this announcement or any matter referred to in this
announcement.
UBS is acting exclusively as financial adviser to 365 Media and no one else in
connection with the Offer and this announcement and will not be responsible to
anyone other than 365 Media for providing the protections afforded to clients of
UBS nor for providing advice in connection with the Offer or this announcement
or any matter referred to in this announcement.
Appendix I
Conditions and certain further terms of the Offer
The Offer which is being made by Sky Holdings, complies with the Code and is
governed by English law and is subject to the jurisdiction of the courts of
England. The Offer is being made on the terms and conditions set out in the
Offer Document.
The Offer is subject to the following conditions:
a. valid acceptances being received (and not, where permitted, withdrawn)
by not later than 3.00 p.m. on 5 January 2007 (or such later time(s) and/or
date(s) as Sky Holdings may, with the consent of the Panel or in accordance
with the Code, decide) in respect of not less than 90 per cent. (or such
lesser percentage as Sky Holdings may decide) in nominal value of the 365
Media Shares to which the Offer relates, provided that this condition shall
not be satisfied unless Sky Holdings and/or any of its wholly-owned
subsidiaries shall have acquired or agreed to acquire, whether pursuant to
the Offer or otherwise, 365 Media Shares carrying, in aggregate, more than
50 per cent. of the voting rights then exercisable at a general meeting of
365 Media, including for this purpose to the extent (if any) required by
the Panel, any such voting rights attaching to any 365 Media Shares that
may be unconditionally allotted or issued before the Offer becomes or is
declared unconditional as to acceptances whether pursuant to the exercise
of any outstanding conversion or subscription rights or otherwise, and for
this purpose:
i. the expression "365 Media Shares to which the Offer relates" shall be
construed in accordance with sections 428 to 430F inclusive of the
Companies Act;
ii. the expression "shares that may be unconditionally allotted or issued"
shall include any Treasury Shares which are unconditionally transferred
or sold by 365 Media;
iii.365 Media Shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will carry
on being entered into the register of members of 365 Media; and
iv. valid acceptances shall be deemed to have been received in respect of
365 Media Shares which are treated for the purposes of section 429(8)
Companies Act as having been acquired or contracted to be acquired by
Sky Holdings by virtue of acceptances of the Offer;
b. the Office of Fair Trading (or if relevant the Secretary of State)
confirming in terms satisfactory to Sky Holdings that the transaction does
not qualify for investigation or issuing a decision, in terms satisfactory
to Sky Holdings, that it is not its intention to refer the proposed
acquisition of 365 Media by Sky Holdings or any matter arising therefrom to
the Competition Commission and the deadline for appealing such a decision
or any matter arising therefrom to the Competition Appeals Tribunal having
expired without such an appeal having been made;
c. one of the following events having occurred in Ireland:
i. the Irish Competition Authority having informed Sky Holdings and 365
Media that it has determined, pursuant to section 21(2)(a) of the Irish
Competition Act that the Offer and/or its implementation may be put
into effect and the Minister for Enterprise, Trade and Employment not
having directed the Irish Competition Authority to carry out an
investigation under section 22 of the Irish Competition Act and the
Irish Competition Authority not having informed Sky Holdings and 365
Media that it intends to carry out an investigation under section 22 of
the Irish Competition Act; or
ii. the period specified in section 19(1)(c) of the Irish Competition Act
having elapsed without the Irish Competition Authority having informed
Sky Holdings and 365 Media of the determination (if any) it has made
under section 21(2)(a) or (b) of the Irish Competition Act;
d. no government or governmental, quasi-governmental, supranational,
statutory, administrative or regulatory body, authority, court, trade
agency, association, institution, environmental body or any other person or
body in any jurisdiction (each a "Relevant Authority") having decided to
take, instituted, implemented or threatened any action, proceedings, suit,
investigation, enquiry or reference, or made, proposed or enacted any
statute, regulation, order or decision or taken any other steps and there
not continuing to be outstanding any statute, regulation, order or
decision, which would or might:
i. make the Offer or the acquisition of any 365 Media Shares, or control
of 365 Media by Sky Holdings void, illegal or unenforceable or
otherwise restrict, restrain, prohibit, delay or interfere with the
implementation thereof, or impose additional conditions or obligations
with respect thereto, or require material amendment thereof or
otherwise challenge or interfere therewith;
ii. require or prevent the divestiture by 365 Media or any of its
subsidiaries or subsidiary undertakings or any associated undertaking
or any company of which 20 per cent. or more of the voting capital is
held by the 365 Media Group or any partnership, joint venture, firm or
company in which any member of the 365 Media Group may be interested
(the "wider 365 Media Group") or by Sky or any of its subsidiaries or
subsidiary undertakings or any associated undertaking or any company of
which 20 per cent. or more of the voting capital is held by the BSkyB
Group or any partnership, joint venture, firm or company in which any
member of the BSkyB Group may be interested (the "wider BSkyB Group")
of all or any portion of their respective businesses, assets or
property or impose any limitation on the ability of any of them to
conduct their respective businesses or own any of their assets or
property;
iii.impose any limitation on or result in a delay in the ability of any
member of the wider 365 Media Group or wider BSkyB Group to acquire or
to hold or to exercise effectively any rights of ownership of shares or
loans or securities convertible into shares in any member of the wider
365 Media Group or of the wider BSkyB Group held or owned by it or to
exercise management control over any member of the wider 365 Media
Group or of the wider BSkyB Group;
iv. require any member of the wider BSkyB Group or the wider 365 Media
Group to acquire or offer to acquire any shares or other securities in
any member of the wider 365 Media Group; or
v. otherwise materially and adversely affect the assets, business, profits
or prospects of any member of the wider BSkyB Group or of any member of
the wider 365 Media Group;
and all applicable waiting and other time periods during which any such
Relevant Authority could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or reference
having expired, lapsed or been terminated;
e. all necessary notifications and filings having been made, all applicable
waiting periods (including any extensions thereof) under any applicable
legislation or regulations of any jurisdiction having expired, lapsed or
been terminated, in each case in respect of the Offer and the acquisition
of any 365 Media Shares, or of control of 365 Media, by Sky Holdings, and
all authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals ("Authorisations")
necessary or appropriate in any jurisdiction for, or in respect of, the
Offer and the proposed acquisition of any 365 Media Shares, or of control
of 365 Media, by Sky Holdings and to carry on the business of any member of
the wider BSkyB Group or of the wider 365 Media Group having been obtained,
in terms and in a form satisfactory to Sky Holdings, from all appropriate
Relevant Authorities and from any persons or bodies with whom any member of
the wider BSkyB Group or the wider 365 Media Group has entered into
contractual arrangements and all such Authorisations remaining in full
force and effect at the time at which the Offer becomes unconditional in
all respects and Sky Holdings having no knowledge of an intention or
proposal to revoke, suspend or modify or not to renew any of the same and
all necessary statutory or regulatory obligations in any jurisdiction
having been complied with;
f. except as publicly announced by 365 Media prior to the date of this
announcement (by the delivery of an announcement to a Regulatory
Information Service) or fairly disclosed in writing to Sky Holdings by 365
Media by reference to this condition prior to the date of this
announcement, there being no provision of any arrangement, agreement,
licence, permit or other instrument to which any member of the wider 365
Media Group is a party or by or to which any such member or any of their
assets is or may be bound, entitled or be subject to and which, in
consequence of the Offers or the acquisition or proposed acquisition of any
365 Media Shares, or control of 365 Media, by Sky Holdings or otherwise,
would or might reasonably be expected to result in (in any case to an
extent which is material in the context of the 365 Media Group taken as a
whole):
i. any monies borrowed by, or other indebtedness actual or contingent of,
any such member being or becoming repayable or being capable of being
declared repayable immediately or prior to its or their stated maturity
or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or becoming capable of being
withdrawn or inhibited;
ii. the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets
of any such member or any such security (whenever arising or having
arisen) being enforced or becoming enforceable;
iii.any such arrangement, agreement, licence or instrument being terminated
or adversely modified or any action being taken of an adverse nature or
any obligation or liability arising thereunder;
iv. any assets of any such member being disposed of or charged, or right
arising under which any such asset could be required to be disposed of
or charged, other than in the ordinary course of business;
v. the interest or business of any such member of the wider 365 Media
Group in or with any firm or body or person, or any agreements or
arrangements relating to such interest or business, being terminated or
adversely modified or affected;
vi. any such member ceasing to be able to carry on business under any name
under which it presently does so;
vii.the creation of liabilities (actual or contingent) by any such member;
or
viii. the financial or trading position of any such member being prejudiced
or adversely affected,
and no event having occurred which, under any provision of any arrangement,
agreement, licence or other instrument to which any member of the wider 365
Media Group is a party, or to which any such member or any of its assets
may be bound, entitled or subject, could result in any case, to an extent
which is material in the context of the wider 365 Media Group taken as a
whole in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this condition (f) (in each case to an
extent which is material in the context of the wider 365 Media Group taken
as a whole);
g. except as publicly announced by 365 Media prior to the date of this
announcement (by the delivery of an announcement to a Regulatory
Information Service), no member of the wider 365 Media Group having, since
31 December 2005:
i. issued, agreed to issue or proposed the issue of additional shares or
securities of any class, or securities convertible into, or
exchangeable for or rights, warrants or options to subscribe for or
acquire, any such shares, securities or convertible securities (save as
between 365 Media and wholly-owned subsidiaries of 365 Media and save
for options granted, and for any 365 Media Shares allotted upon
exercise of options granted under the 365 Media Share Option Schemes
before the date hereof), or redeemed, purchased or reduced any part of
its share capital;
ii. sold or transferred or agreed to sell or transfer any Treasury Shares;
iii.recommended, declared, paid or made or proposed to recommend, declare,
pay or make any bonus, dividend or other distribution other than to 365
Media or a wholly-owned subsidiary of 365 Media;
iv. agreed, authorised, proposed or announced its intention to propose any
merger or demerger or acquisition or disposal of assets or shares
(other than in the ordinary course of trading) or to any change in its
share or loan capital which in any case would be material in the
context of the wider 365 Media Group taken as a whole;
v. issued, authorised or proposed the issue of any debentures or incurred
any indebtedness or contingent liability which in each case is material
in the context of the wider 365 Media Group taken as a whole;
vi. acquired or disposed of or transferred, mortgaged or encumbered any
asset or any right, title or interest in any asset (other than in the
ordinary course of trading) in a manner which is material in the
context of the wider 365 Media Group taken as a whole;
vii.entered into or varied or announced its intention to enter into or vary
any contract, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which is of a long-term or unusual nature or
involves or could involve an obligation of a nature or magnitude, and
in either case which is material in the context of the 365 Media Group
taken as a whole;
viii. entered into or proposed or announced its intention other than in the
ordinary course of business to enter into any reconstruction,
amalgamation, transaction, arrangement or scheme which in any case is
material in the context of the 365 Media Group taken as a whole;
ix. taken any action nor having had any steps taken or legal proceedings
started or threatened against it for its winding-up or dissolution or
for it to enter into any arrangement or composition for the benefit of
its creditors, or for the appointment of a receiver, administrator,
trustee or similar officer if it or any of its assets (or any analogous
proceedings or appointment in any overseas jurisdiction) which in any
case is material in the context of the 365 Media Group taken as a
whole;
x. been unable, or admitted in writing that it is unable, to pay its debts
or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business in any case which
is material in the context of the wider 365 Media Group taken as a
whole;
xi. entered into or varied or made any offer to enter into or vary in any
material respect the terms of any service agreement or arrangement with
any of the directors of 365 Media;
xii.waived, compromised or settled any claim which is material in the
context of the wider 365 Media Group taken as a whole; or
xiii. entered into or made an offer (which remains open for acceptance) to
enter into any agreement, arrangement or commitment or passed any
resolution with respect to any of the transactions or events referred
to in this condition (g) in any case which is material in the context
of the wider 365 Media Group taken as a whole;
h. since 31 December 2005, except as publicly announced by 365 Media (by
the delivery of an announcement to a Regulatory Information Service) or
fairly disclosed in writing to 365 Media by reference to this condition, in
each case prior to the date of this announcement:
i. there having been no adverse change in the business, assets, financial
or trading position or profits or prospects of any member of the wider
365 Media Group which in any such case is material in the context of
the 365 Media Group taken as a whole;
ii. no litigation, arbitration proceedings, prosecution or other legal
proceedings having been instituted, announced or threatened by or
against or remaining outstanding against any member of the wider 365
Media Group and no enquiry or investigation by or complaint or
reference to any Relevant Authority against or in respect of any member
of the wider 365 Media Group having been threatened, announced or
instituted or remaining outstanding which in any such case could have
an affect on that member of the 365 Media Group which is material in
the context of the 365 Media Group taken as a whole; and
iii.no contingent or other liability having arisen or been incurred which
might reasonably be expected to adversely affect any member of the 365
Media Group in a way which is material in the context of the 365 Media
Group taken as a whole;
i. Sky Holdings not having discovered that, save as publicly announced by
365 Media (by the delivery of an announcement to a Regulatory Information
Service) or fairly disclosed in writing to Sky by reference to this
condition, in each case before the date of announcement of the Offer:
i. the financial, business or other information concerning the wider 365
Media Group which has been disclosed at any time by or on behalf of any
member of the wider 365 Media Group whether publicly (by the delivery
of an announcement to a Regulatory Information Service) or to Sky
Holdings or its professional advisers, either contains a material
misrepresentation of fact or omits to state a fact necessary to make
the information contained therein not misleading which is material in
the context of the 365 Media Group taken as a whole; or
ii. any member of the wider 365 Media Group is subject to any liability ,
contingent or otherwise, which is not disclosed in the annual report
and accounts of 365 Media for the financial year ended 31 December 2005
which is or would be likely to be material in the context of the 365
Media Group taken as a whole.
Sky Holdings reserves the right at its absolute discretion to waive, in whole or
in part, all or any of the above conditions, except condition (a).
The Offer will lapse (unless the Panel otherwise consents) if, before 3.00 p.m.
(London time) on 5 January 2007 or the date when the Offer becomes or is
declared unconditional as to acceptances (whichever is the later): (i) the Irish
Competition Authority informs Sky Holdings and 365 Media that it intends to
carry out an investigation under section 22 of the Irish Competition Act in
relation to the Offer and/or its implementation; or (ii) the Offer, or any
aspect of it, is referred to the Competition Commission.
If the Offer lapses, the Offer will cease to be capable of further acceptance
and Sky Holdings and accepting 365 Media Shareholders shall then cease to be
bound by Forms of Acceptance submitted at or before the time when the Offer
lapses.
Appendix II
Irrevocable undertakings to accept the Offer
365 Media Shareholder providing Approximate number Approximate percentage of
the irrevocable undertaking of 365 Media Shares 365 Media Shares in issue
Peter Dubens 11,084,571 7.82
Eric Semel 12,196,100 8.60
David Annat 20,000 0.01
Andrew Galvin 20,000 0.01
Christina Kennedy 47,601 0.03
Alex Berger 194,065 0.14
ENIC Gaming Limited 12,000,000 8.46
Centrecourt Ventures Inc 990,777 0.70
UBS Global Asset Management (UK) Ltd 4,502,184 3.17
The Conversion Master Fund Limited 2,442,200 1.72
Appendix III
Definitions and Glossary
In this announcement, the following expressions have the following meanings
unless the context otherwise requires:
"365 Media" 365 Media Group plc
"365 Media Directors" the directors of 365 Media
"365 Media Group" 365 Media and its subsidiary undertakings
"365 Media the participants in the 365 Media Share Option Schemes
Optionholders"
"365 Media the holders of 365 Media Shares
Shareholders"
"365 Media Shares" the existing unconditionally allotted or issued and fully
paid ordinary shares of 1 pence each in the capital of 365
Media (but excluding any Treasury Shares held by 365
Media) and any further shares which are unconditionally
allotted or issued and fully paid, and any Treasury
Shares unconditionally sold or transferred by 365 Media,
in each case, prior to the date on which the Offer
closes (or such earlier date as Sky Holdings may, with the
Panel's consent and subject to the Code, decide) including
any such shares so unconditionally allotted or issued
pursuant to options granted under the 365 Media Share
Option Schemes
"365 Media Share the ukbetting plc Employee Share Option Scheme 2001, the
Option Schemes" ukbetting plc Inland Revenue Approved Share Option Plan
2004, the ukbetting plc Unapproved Share Option Plan 2004, the
Sportscard Group plc share option exchange agreements dated 4
March 2001, the option agreement with Alan Pereira dated 31
July 2001 and the option agreements with executives of Rivals
Digital Media Limited dated 24 December 2003
"AIM" the market of that name operated by the London Stock Exchange
"AIM Rules" the rules of AIM as published by the London Stock Exchange
from time to time governing admission to and the operation of
AIM
"Australia" the Commonwealth of Australia, its states, territories and
possessions
"Board" the board of directors of Sky or 365 Media (as the case may
be)
"BSkyB Group" Sky and its subsidiary undertakings
"business day" any day, other than a Saturday, Sunday or public or bank
holiday, on which banks are generally open for business in
the City of London other than solely for trading and
settlement of Euro
"Canada" Canada, its provinces, territories and all areas subject to
its jurisdiction and any political sub-division thereof
"Closing Price" the closing middle market price of a 365 Media Share on a
particular business day as derived from the Daily Official
List
"Code" the City Code on Takeovers and Mergers
"Companies Act" the Companies Act 1985 (as amended)
"Daily Official List" the daily official list of the London Stock Exchange
"DTH" direct to home satellite television
"First Payment Date" 31 December 2007
"Form of Acceptance" the form of acceptance and authority relating to the Offer
which accompanies the Offer Document
"Ireland" the Republic of Ireland
"Irish Competition the Irish Competition Act, 2002
Act"
"Japan" Japan, its cities, prefectures, territories and possessions
"Lazard" Lazard & Co., Limited
"LIBOR" London Inter-Bank Offered Rate for twelve month sterling
deposits
"Loan Note the loan note alternative whereby eligible 365 Media
Alternative" Shareholders who validly accept the Offer may elect to
receive Loan Notes in lieu of all or part of the cash
consideration to which they would otherwise have been
entitled under the Offer
"Loan Notes" the unsecured guaranteed loan notes of GBP1 each of Sky
Holdings to be issued pursuant to the Loan Note Alternative
"London Stock London Stock Exchange plc
Exchange"
"Merrill Lynch" Merrill Lynch International
"Offer" the recommended cash offer made by Sky Holdings to acquire
the issued and to be issued share capital of 365 Media on the
terms and subject to the conditions set out in the Offer
Document and the Form of Acceptance including, where the
context so permits, the Loan Note Alternative and any
subsequent revision, extension, variation or renewal of such
offer
"Offer Document" the document sent to 365 Media Shareholders (and, for
information only, to 365 Media Optionholders) which contains
the terms and conditions of the Offer and the Loan Note
Alternative
"offer period" the period commencing on (and including) 5 October 2006 until
whichever of the following times and dates shall be the
latest:
(i) 3.00 p.m. on 5 January 2007; and
(ii) the earlier of:
(a) the time and date at which the Offer lapses;
and
(b) the time and date at which the Offer becomes
unconditional as to acceptances
"Panel" the Panel on Takeovers and Mergers
"Restricted Overseas a person (including an individual, partnership,
Persons" unincorporated syndicate, limited liability company,
unincorporated organisation, trust, trustee, executor,
administrator or other legal representative) in, or resident
in, or any person whom Sky Holdings believes to be in, or
resident in, or with a registered address in the United
States, Australia, Canada or Japan and any custodian, nominee
or trustee holding 365 Media Shares for persons in such
jurisdictions and persons in any other jurisdiction (other
than persons in the UK) whom Sky Holdings is advised to treat
as restricted overseas persons in order to observe the laws
of such jurisdiction or to avoid the requirement to comply
with any governmental or other consent or any registration,
filing or other formality which Sky Holdings regards as
unduly onerous
"Sky" British Sky Broadcasting Group plc
"Sky Holdings" Sky Holdings Limited, a wholly-owned subsidiary of Sky
"Treasury Shares" shares held as treasury shares as defined in section 162A(3)
of the Companies Act
"UBS" or "UBS UBS Limited
Investment Bank"
"United Kingdom" or " the United Kingdom of Great Britain and Northern Ireland
UK"
"United States" or the United States of America, its territories and
"US" possessions, any state of the United States of America and
the District of Columbia and all other areas subject to its
jurisdiction
US Securities Act the United States Securities Act of 1933 (as amended).
In this announcement, the singular includes the plural and vice versa, unless
the context otherwise requires.
For the purposes of this announcement, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the meanings given by the
Companies Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A
of the Companies Act).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BRITISH SKY BROADCASTING GROUP PLC
Date: 15 December, 2006 By: /s/ Dave Gormley
Dave Gormley
Company Secretary