Hedge fund or Force News Corp to raise BSkyB bid

Beijing time May 11 afternoon news, as hedge funds increased its stake in BSkyB, the company's board may be under pressure to demand News Corp to increase the bid price of 2.2 billion pounds (about 3.6 billion U.S. dollars). When the British government is considering whether to eventually approve the acquisition, institutional investors have since last November to reduce the share of sky Broadcasting.　　However, as the deal approached, hedge funds began to buy the company's shares aggressively. "As the end result and process become clearer, people will gradually get involved in winning the spreads."　　Scott Moeller, a professor at Cass Business School in London, Scott Moller. Once the government approves the deal initially, News Corp will start the bid negotiations. The company currently has a 39% per cent stake in Sky Broadcasting.　　The risk for the BSkyB board is that if shareholders push the purchase price higher than the current market value, News Corp will likely abandon the acquisition and eventually lead its share price back to the level before the offer was issued. Hedge funds ' buying spree in the deal was the same as Kraft's 2010 acquisition of Cadbury.　　Before the deal was completed, global short-term traders held a 31% stake in Cadbury and unduly affected the price of the deal. Sky broadcast last June rejected News Corp's bid for 700 pence (7.8 billion pounds) per share, and said the minimum purchase price was 800 pence.　　Sky broadcasts close to 842 pence in the closing price of Tuesday. Citigroup analysts believe News Corp may be willing to pay a price of 900 to 1000 pence.　　The sky broadcast is worth at least 900 pence per share, says Michael T. Shannon, Westchester Capital Management, a US asset management firm. Despite the enthusiasm of investors, COO Ches Kelly, the news group that runs the deal, said the price of Sky Broadcasting was already too high. "The price of Sky Broadcasting is clearly disturbing," he said on an analyst conference call on May 4. He said the company's cash flow and profits could support the premium level last summer, but could not support the current premium level.　　The unit's closing price last June 14 was 600.5 pence, and News Corp announced its initial offer the next day. Data explorers, the securities trading information provider, shows that the most new sky-holding shares are mainly hedge funds.　　Most investors believe the deal will eventually be reached, with less than 1% of the tradable shares in short sales.　　Sky Broadcasting rejected News Corp's takeover last June, saying there was a "big gap" between the offer and the company's value. The industry believes Kraft's $13.6 billion purchase of Cadbury's deal is a precedent. At that time, a lot of Cadbury's short-term investors got 3 in 6 weeks.3% annual rate of return.　　While many hedge funds are short-term investors, some investors are bullish on the long-term value of Sky broadcasting, including the UK fund Taube Hodson Stonex, which shares the company in 1998. News Corp said in January this year that it would split Sky's Sky News channels to ease concerns about excessive media concentration and avoid long-term scrutiny.　　But people close to the situation said the approval process slowed as a result of Ofcom's intervention. A spokesman for the British government, Ofcom, Sky Radio and News Corp declined to comment. (Ding Macro)