BSkyB all set to acquire Easynet

BSkyB all set to acquire Easynet

	Published : Sat, 22 Oct 2005 06:05 By : David Simms Print this Story

LONDON: Rupert Murdoch group company British Sky Broadcasting Group Plc is buying high-speed Internet provider Easynet Group Plc for 211 million pounds with an intent to enter Britain's fast growing broadband Internet market and offer stiffer competition to its cable rivals. The company is paying 175 pence in cash for each Easynet share, a premium of 38 per cent to the share's closing price Thursday.

The buy-out enables BSkyB to offer what is described as "triple play" service -- broadband, television and telephony services in one pipe -- thus taking on telecom major BT Group Plc and the proposed unified entity out of the merger of NTL and Telewest.

The company said Easynet would provide it with an established presence in the broadband market and an important source of new revenues and new customers. Easynet offers its services largely to corporations.

BSkyB's chief executive James Murdoch said the acquisition positions his company very well to take a leading position in a "very attractive and fast growing segment of the market".

Rupert Murdoch's News Corp has 37 per cent holding in BSkyB, which is the leader in Britain's Pay TV segment. It has announced its plans to raise 1 billion pounds through bonds and a part of the funds raised will be used for acquisitions.

James Murdoch said his company is open to ways of accelerating its growth and wants to keep all options open.

The Easynet deal would give the company control over an advanced Internet Protocol-based national telecoms network and access to about 18 per cent of homes in 50 cities and towns in England and Scotland. This is estimated as equal to the footprint of Telewest. Easynet has invested in "local loop unbundling" and placed its own equipment at BT Group's local exchanges, a process that will enable it to sell telecoms and Internet services directly to homes without depending on BT.

Easynet has a loss-making continental European business, and it is not clear what BSkyB will do with this outfit.