BSkyB buys Amstrad for £125m

BSkyB has made a surprise cash offer of £125m to buy out Sir Alan Sugar’s computer, phone and set-top box manufacturer, Amstrad.

The offer is almost 28 per cent higher than Amstrad’s share price yesterday and will allow Sky to bring a large portion of its set-top box needs in-house. Around 75 per cent of the set-top boxes Amstrad produces are Sky+ boxes for Sky, which in turn make up about 30 per cent of Sky’s total set-box needs.

Sugar, who owns 29.7 per cent of the company, has accepted the bid. He will not, however, be hearing his famous ‘You’re Fired’ phrase since he will be staying on.

The acquisition gives Sky access to its own product design and development resources for new products and will help greatly reduce its procurement costs for set-top boxes.

"Amstrad has worked closely with Sky for many years and I cannot imagine a better home for the Amstrad business and its talented people,” commented, Amstrad's chairman and chief executive, Sir Alan Sugar.

“Our companies share the entrepreneurial spirit of bringing innovation to the largest number of customers. Sky is a great British success story. I’m proud to have worked so closely with it, and I look forward to continuing to play a part in this exciting business.”

Sky's chief executive officer, James Murdoch, added: “Sky and Amstrad have had a long and positive relationship. The acquisition accelerates supply chain improvement and will help us to drive innovation and efficiency for the benefit of our customers.”

Amstrad played an early but eccentric part in UK computing history with its release of the first affordable IBM comptible and the PCW wordprocessor (not relation to PCW magazine) - see Test Bed comment.

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