A massive stock market placing of BSkyB shares on behalf of Vivendi Universal was implemented Tuesday by Deutsche Bank. Up for auction were 250 million shares, lodged with Deutsche Bank last September by the cash-strapped French media group as collateral for a £2.5 billion loan.
Based on BSkyB’s current stock price, the offering is valued at £1.7bn. It is a significant litmus test of the market’s current attitude toward media stocks – not flavour of the month right now.
News of the placing drove down BSkyB shares by 4.4% to £6.765 when the London Stock Exchange opened Tuesday morning, brokers and investors fearing that the release of such a massive block of shares would dilute the broadcaster’s share price.
However, the shrewder punters sniffed the heady scent of a quick profit and by close of trading Tuesday the shares had recovered spectacularly to £7.10 – a gain of over 5%.on the day’s low.
Data sourced from: MediaGuardian.co.uk and BBC Online Business News (UK); additional content by WARC staff