TYCOON Sir Alan Sugar looks set to join the Murdoch empire after agreeing to sell his Amstrad business to BSkyB for £125m.
The star of BBC’s The Apprentice will make £35m from the sale, but will remain with the Amstrad business under its proposed new owner.
Sir Alan founded Amstrad in 1968 and turned it into a household name after launching the first mass market home computer package in 1984. At its peak, the firm was valued at £1.25bn.
The Essex company now generates three-quarters of its revenues from the sale of set-top boxes to BSkyB, which has worked closely with Amstrad over many years. The broadcaster – 39.1% owned by Rupert Murdoch’s News Corporation – said it would benefit from an in-house design and development capability.
Sir Alan said he could not imagine a better home for the Amstrad business, which supplied an estimated 30% of Sky’s set-top boxes in the year to June 30.
He said: “I turned 60 this year, I’ve done 40 years of hustling in this business. I have to start thinking about my team of loyal staff, many of whom have been around me for a very long time.”
Sir Alan said he did not think he was letting go of the Amstrad name by selling the firm, and he would still be involved. “There’s a certain culture there that will exist. It’s not a case of letting it go, it’s a case of moving the company on to something more positive.”
Despite enjoying good working relationships, Amstrad said its directors recognised the vulnerability of relying on just two main customers, the other being Sky Italia.
It said the long-term future of Amstrad could be under threat from the potential loss of its largest customer, which would be difficult to replace.
Sir Alan is worth an estimated £830m and ranked 84th on this year’s Sunday Times Rich List, helped by his many property investments.
No stranger to the limelight, Sir Alan was chairman of Tottenham Hotspur FC, which he bought in 1991, and has told contestants: “You’re Fired” at the end of each show in The Apprentice.
Yesterday’s deal values each Amstrad share at 150p, a premium of 23.7% on the price before the deal being announced. BSkyB said its offer for Amstrad so far had the support of shareholders with 44.8% of the company, including the 27.9% held by Amshold, a business controlled by Sir Alan.
BSkyB chief executive James Murdoch said: “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.” Analysts at Numis Securities said the deal eliminated the estimated 20% margin historically paid by BSkyB to Amstrad on each box bought.
It said: “By bringing the business in-house, we believe BSkyB will be able to deliver cost savings, greater product control and enhanced innovation and design.”