BSkyB has agreed to buy broadband provider Easynet for £211 million to help it expand into the fast-growing market for high-speed Internet connections.
BSkyB said today it would pay 175 pence in cash for each Easynet share, a 38 per cent premium to their closing price of 127p yesterday.
The deal will allow it to offer so-called triple-play services such as broadband, television and telephony to customers, putting it in head-to-head competition with the merging cable companies Ntl and Telewest as well as BT Group.
BSkyB, 37 per cent owned by Rupert Murdoch's media conglomerate News Corp, said last week it planned to raise about £1 billion with a bond placement, with some of the proceeds earmarked for acquisitions.
The company also signalled last month that it wanted to move to a hybrid Internet and satellite delivery platform.
The Easynet acquisition is the boldest strategic move so far by BSkyB chief executive James Murdoch, Rupert's son.
Since he arrived, BSkyB has aggressively targeted new subscribers to reach its goal of 10 million by 2010, up from about eight million by the end of this year.