newscorplogoNEW YORK, NY, June 15, 2010 – News Corporation (“News Corp”) announces that it approached the Board of British Sky Broadcasting Group plc (“BSkyB”) on Thursday, 10 June 2010, and proposed making an offer to acquire the entire issued and to Sky logobe issued share capital of BSkyB not already owned by it for 675 pence in cash per share subject to the conditions described in this announcement. After News Corp made the proposal, the Independent Directors of BSkyB requested that News Corp enter into discussions with the objective of achieving an agreed proposal for the mutual benefit of all shareholders. Following these discussions, News Corp increased the proposal to 700 pence in cash per share (the “Proposal”).

News Corp and the BSkyB Independent Directors have been unable to reach a mutually agreeable price at the current time. However, both parties have agreed to work together to proceed with the regulatory process in order to facilitate a proposed transaction and, accordingly, we have agreed to enter into a Cooperation Agreement, details of which are set out below.

News Corp has been a major shareholder in BSkyB for over twenty years and has had Board representation throughout that period. News Corp currently owns 686,021,700 BSkyB shares, representing 39.1% of BSkyB’s issued share capital.

Highlights of the Proposal
– News Corp proposes to the Independent Directors of BSkyB an offer of 700 pence in cash per share for the shares in BSkyB that it does not already own.
– The Proposal is at an attractive price and represents:
– a premium of approximately 22.0% to BSkyB’s share price of 574 pence at the close of business on 9 June 2010, being the day prior to News Corp’s approach to the BSkyB Board; a premium of approximately 27.5% to the average closing price of approximately 549 pence for the twelve month period to 9 June 2010, being the day prior to News Corp’s approach to the BSkyB Board; and a multiple of approximately 11.8 times BSkyB’s earnings before interest, tax, depreciation and amortisation of £1,139 million (US$1,686 million) for the pro-forma twelve month period
ended 31 March 2010.
– The Proposal values the fully diluted share capital of BSkyB, excluding the shares already owned by News Corp, at approximately £7.8 billion (US$11.5 billion).

Chase Carey, Deputy Chairman, President and Chief Operating Officer, News Corp, commented:

“We are proud of the success BSkyB has achieved over the years and of the many innovations it has brought to consumers in the UK and Ireland. That success is reflected in its strong public market valuation. Our increased proposal represents both an attractive valuation at approximately 11.8 times EBITDA for the twelve months to 31 March 2010 and a premium of 27.5% over BSkyB’s average share price for the last twelve months prior to our approach.

“We believe that this is the right time for BSkyB to become a wholly-owned part of News Corporation with its greater scale and broader geographic reach. For News Corporation, our Proposal presents an opportunity to consolidate a core business with which we have been closely associated for over two decades. News Corporation will also benefit from increasing the geographic diversification of our earnings base, reducing our exposure to cyclical advertising revenues and increasing our direct consumer subscription revenues.

“However, we are taking a disciplined approach to this transaction, recognising both the market valuation of BSkyB and our substantial existing ownership.

“It goes without saying that we are a committed shareholder and are fully supportive of the talented management team and exceptional people at the company.”

News Corp plans to finance its proposed offer by using a significant portion of the available cash on its balance sheet plus borrowed funds.

IMPORTANT NOTICE
News Corp’s Proposal is subject, inter alia, to the following pre-conditions: clearance of the proposed transaction by the EC and any other relevant competition or regulatory authority; and News Corp obtaining satisfactory financing.

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