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BSkyB surges on merger talk
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February 23, 1999: 6:16 a.m. ET
Report: U.K. broadcaster and France's Canal Plus discussing possible merger
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LONDON (CNNfn) - Shares in BSkyB and Canal Plus soared Tuesday, on a published report that the groups are in talks to create a European pay-television giant.
The companies declined to elaborate to CNNfn on a report in The Wall Street Journal that they're holding preliminary talks on a merger.
A Canal Plus spokesman did confirm some sort of discussions between the companies are taking place, but said that similar talks were being held with other media groups.
BSkyB is the U.K.'s biggest pay-TV provider, with seven million subscribers. It is 40 percent owned by Rupert Murdoch. Canal Plus is 34 percent owned by France's Vivendi. It's Europe's biggest pay-TV company, with more than 11 million subscribers in 10 countries.
Murdoch is seeking a merger of equals or at least an asset swap, according to the Journal, to gain the last piece of his global jigsaw. But "people familiar with the situation" warned that the deal may not go through, citing tax problems, management issues and possible opposition from both shareholders and regulators.
The focus shifted to a possible link-up between BSkyB and Canal Plus after talks between the U.K broadcaster and Telecom Italia broke down 10 days ago.
The collapse of those talks, in which the media mogul was trying to buy the telecom company's Stream pay-TV unit, dealt a blow to Murdoch's ambition to expand into continental Europe.
BSkyB's (BSY) shares soared 5.26 percent to 547 pence in London in morning trading, while Canal Plus (PAN) was up 4 percent at 306.5 euros in Paris.
Canal Plus and BSkyB have 11 million and 7 million subscribers, respectively.
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