Nov. 21 (Bloomberg) -- Sky Deutschland AG, the German pay-TV provider half-owned by Rupert Murdoch’s News Corp., rose as much as 13 percent in Frankfurt trading after regulators paved the way for a takeover with a favorable tax ruling.
Sky Deutschland rose 27 cents, or 7.5 percent, to 3.86 euros at 10:33 a.m. local time, with volume reaching more than double the three-month average. The shares earlier jumped 13 percent, the biggest intraday move since April.
German authorities approved an accounting method which would allow Sky to preserve part of its 2.3 billion euros ($2.9 billion) in tax losses, reducing future obligations, in the event that ownership changed. The move makes it more likely that News Corp. will increase its stake to more than 50 percent or make a bid for the entire company, Polo Tang, an analyst at UBS AG, said today in a note to investors.
“We would expect NWS to move to increase its stake,” Tang said. “Prior to this approval, SkyD would have lost all of its tax assets had NWS increased its shareholding.”
Miranda Higham, a News Corp. spokeswoman, declined to comment.
Sky Deutschland, which has reported net losses since 2006, also has been working to refinance some of its borrowings. The Unterfoehring, Germany-based company had net debt of 549 million euros at the end of September.
Chief Executive Officer Brian Sullivan is trying to increase subscribers’ monthly bills and expand the company’s programming to mobile devices and high-definition channels. Germany’s government cut its 2013 growth forecast for the country last month as southern Europe’s debt crisis spreads throughout the region.
To contact the reporter on this story: Amy Thomson in London at firstname.lastname@example.org
To contact the editor responsible for this story: Kenneth Wong at email@example.com