21st Century Fox (NASDAQ:FOXA) isn't saying how it plans to use the ~$7.2B in cash after taxes that it expects to receive in the sale of its pay-TV businesses in Germany and Italy to BSkyB (OTCQX:BSYBY), but clearly the deal gives Rupert Murdoch ammunition to increase his $85/share bid for Time Warner (NYSE:TWX) without jeopardizing Fox’s investment-grade credit rating.
BSkyB, which is 39% owned by Fox, becomes a European satellite and cable service with 2M subscribers, and gains leverage as it negotiates for right to sports and entertainment.
The deal is great for Murdoch since now he can keep on pursuing the TWX deal and fulfill his dream of becoming the single entrepreneur in the global media industry with the largest content breadth and depth.
Also: Fox says it will renew a share buyback program using the proceeds from the BSkyB deal, regardless of any acquisitions it undertakes.
TWX +0.3% premarket.