Murdoch expected to pay 875p a share for full control of BSkyB

RUPERT Murdoch is expected to pay at least 875p a share to secure the shares in BSkyB he needs to acquire the whole of the company, say analysts.

The market was cooling on a bid of between 900p to 950p that was talked about soon after the News Corporation boss got the go-ahead to launch a bid from culture and media secretary Jeremy Hunt.

But some believe Murdoch will not wait long before making his move for the 61 per cent of BSkyB he doesn't own and that he could still be persuaded to pay at the top end of the range.

"If Rupert sees something he likes he tends to pay up for it," said Peel Hunt analyst Patrick Yau. "But he'll be cautious of looking like he's overpaying."

A more cautionary tone has emerged as questions about future earnings growth and the lack of a rival bidder have tempered expectations.

News Corp, which owns 39 per cent of the firm, was knocked back in June when it bid 700p per share for the rest. BSkyB's independent directors demanded at least 800p.

There is a view that News Corp's agreement to spin off its flagship Sky News channel is an indication of Murdoch's determination to secure a quick deal. BSkyB's heavy investment phase in broadband and high-definition television is deemed to be paying off and some shareholders believe a high price can be exacted from News Corp.

Fidelity believes negotiations should start at 950p with a possible premium on top, to buy out a company which posted first-half earnings per share up 32 per cent.

However, Odey Asset Management chief executive David Stewart said he does not want to sell at all but has said a deal will depend on whether other shareholders are happy with 900p or more.

Mark Kelly at broker Olivetree Securities said: "Sky has gone through a pretty intensive period of capex and for the next couple of years at least should be somewhat of a cash cow. But after that they're going to have to start innovating again and probably spending, and the question marks come in."

With no major synergies available between the two sides and no other obvious bidder, News Corp would not want to pay a premium, say some. News Corp stuck to its guns last week, with chief operating officer Chase Carey saying 700p was a fair price.