After upwards momentum in its share price all day pay-TV giant Sky (SKY) has exploded 31.6% higher to £10.38 as it confirms a £10.75 per share cash bid from US multinational media company 21st Century Fox (FOX:NDQ).

This is a 36% premium to the close on 8 December but is below 52-week highs of £11.34. The company is willing to recommend the approach 'subject to reaching agreement on the other terms'.

Back of an envelope calculations suggest the deal is 15% cheaper for the US suitor at current exchange rates than it would have been prior to the Brexit vote due to the depreciation of sterling

SKYCHART

In accordance with the takeover code, Fox must announce its firm intention to make an offer by 5pm on Friday 6 January or walk away.

Fox is linked to Sky through both its 39% stake and the connections both businesses have to media mogul Rupert Murdoch.

Murdoch's News Corporation tried to buy Sky (then BSkyB) in a 700p per share deal in 2010 but the deal eventually collapsed amid the phone hacking scandal.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJBell logo

Issue Date: 09 Dec 2016