Stock market people - explain BSKYB to me

[moneydunce]

I have some Sky shares which are doing very nicely due to this whole NewsCorp takeover business.

Now, can someone explain the rudimentaries of the how this takeover will work. Does Rupert Murdoch want to buy MY shares, or is he planning to buyout another large investor.

If he does want to buy my shares, will it be a formal offer with a fixed price, or is the hope that enough people will decide to sell them because the price is going up.

Once, he has got his stakeholding, then what? Will the price stay high or drop back down.

Essentially, should I be selling them or holding onto them.

I really should understand more about this

As far as I understand it, he makes an offer of x price, the Board then decides to recommend it to shareholders (if it thinks the price is right), and the shareholders then vote on whether they want to accept the bid or not.

Rupert Murdoch does indeed want to buy your shares, along with everyone else's. I believe the point of him buying the rest of BSkyB that he does not already own will have the effect of removing it from the market - there's no point in a company being quoted if one person owns all the shares.

Basically, as a small shareholder, you have a small voice. If the majority of shareholders (and that means the holders of the majority of shares, not the greatest number of shareholders, so will be dominated by big institutional investors - pension funds and so on) want to sell, you'll just have to go along with it whether you agree with it or not.

The shares have gone up because people expect the Board to demand a higher price than Murdoch has so far offered. As such, it might not be a bad time to sell, because they might have overshot on the upside - i.e. be currently trading at more than the eventual bid price. However, if you do sell now and the agreed takeover price is higher, you'll have lost out on some potential upside.

I've just been looking at the latest stock market announcements on www.investegate.co.uk and it looks like people have been enthusiatically selling at 827-833p.