LONDON (BNO NEWS) -- Rupert Murdoch's News Corporation (News Corp) on Tuesday said it is in negotiations with the British Sky Broadcasting (BSkyB) to buy all of its shares it does not already own.

News Corp - home to Fox broadcasting and cable networks, the Twentieth Century Fox movie studios and newspapers such as The Wall Street Journal - said it approached the Board of BSkyB on Thursday and proposed to make an offer to acquire all shares it does not already own for 675 pence in cash per share. "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," the company said.

Following these discussions, News Corp increased the proposal to 700 pence in cash per share - an offer which BSkyB is unlikely to accept. "The Independent Directors [..] have indicated to News Corporation that, based on facts and circumstances today, they would have been prepared to support a proposal if, upon satisfaction of the regulatory pre-conditions, it would deliver value in excess of 800 pence per share," a statement from BSkyB read.

The proposal of 700 pence in cash per share would value BSkyB at approximately £7.8 billion (US$11.5 billion), which excludes 686,021,700 shares (39.1%) currently owned by News Corp.

Although News Corp and the BSkyB Independent Directors have been unable to reach a mutually agreeable price at this time, both parties have agreed to work together to proceed with the regulatory process in order to facilitate a proposed transaction.

"Recognizing that an offer from News Corporation could be in the interests of BSkyB shareholders in the future, and that obtaining any necessary merger clearances would facilitate such an offer, BSkyB has agreed to co-operate with News Corporation in seeking those clearances from the relevant authorities," BSkyB said in a statement.

(Copyright 2010 by BNO News B.V. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without explicit prior permission from BNO News B.V. Contact sales@bnonews.com for more information about subscriptions.)