FRANKFURT: The management of pay-TV provider Sky Deutschland has advised minority investors not to accept an offer from BSkyB, a token gesture given that BSkyB's terms are little more than a formality required after its purchase of a controlling stake in the broadcaster.
BSkyB in July agreed to buy the 57 percent stake in Sky Deutschland owned by Rupert Murdoch's 21st Century Fox, and offered remaining shareholders 6.75 euros for each of their shares, as mandated by German takeover law.
But with only a small premium on the table, analysts have doubted that many will sell.
Sky Deutschland would thus retain its stock market listing and BSkyB, in which Fox holds 39 percent, has not indicated any desire to squeeze out minority shareholders above and beyond the offer which it has set out.
Management of the German company, advised by Bank of America Merrill Lynch, on Wednesday argued the offer fell short of its true value.
"The management board and the supervisory board believe that the consideration offered by the bidder does not reflect the full potential and thus intrinsic value of Sky Deutschland's business," the two bodies said in a joint statement.
BSkyB said in a statement that it was aware of Sky Deutschland's position but that the deal was sealed.
"There is no minimum acceptance to our offer and we look forward to completing the acquisition of Sky Italia and a majority of Sky Deutschland later this year," it said.
Sky Deutschland Chief Executive Brian Sullivan is the only member of the management board who holds shares in the group and he said he would not be accepting the offer.
Two supervisory board members, Stefan Jentzsch and Harald Roesch, also said they would not tender shares they hold.
"The management and supervisory board statement fully supports our assessment that the takeover price is too low and does not fully reflect the earnings potential in the company," DZ Bank analysts said in a client note.
The analysts said they would stick to a "fair value" of 7.60 euros per Sky Deutschland share and recommended investors do not accept the offer. Sky Deutschland shares were flat at 6.73 euros, around the offer price, by 0930 GMT.
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