British Sky Broadcasting shares surge more than 19% By Sarah Turner, MarketWatch LONDON (MarketWatch) -- European shares edged lower on Tuesday, as a downgrade of Greece's credit rating refocused attention on fiscal deficits, although British Sky Broadcasting shares soared on takeover hopes. The Stoxx Europe 600 index (ST:SXXP 252.26, -0.27, -0.11%) declined 0.3% to 251.66, after gaining for four straight sessions. Late Monday, Moody's rating agency downgraded Greece's government bond ratings to Ba1 from A3. "We think that this downgrade should have taken place six to nine months ago in order to be value adding," said strategists at Danske Bank. However, they said that they are expecting downgrades of other peripheral euro zone countries, a term which generally refers to Greece, Spain, Portugal, Italy and Ireland. Spanish banks were weak, with Santander (ES:SAN 8.54, -0.16, -1.83%) (STD 10.45, -0.10, -0.95%) down 1.7% and BBVA (ES:BBVA 8.39, -0.17, -1.94%) shares down 1.2%. Italian-headquartered lender UniCredit (IT:UCG 1.84, -.00, -0.05%) fell 1.1%. Also in Spain, data showed house prices in Spain lost 2.9% in the first quarter of 2010. The Spanish Ibex 35 index (XX:IBEX 9,504, -79.90, -0.83%) declined 1% to 9,486.80, while the Portuguese PSI 20 index (XX:PSI20 7,164, -28.58, -0.40%) lost 1.1% to 7,115.43 and the Italian MIB index lost 0.9% to 20,003.47. The main regional European benchmarks were holding up a bit better with the German DAX index (DX:DAX 6,121, -4.36, -0.07%) down 0.3% at 6,108.46, the French CAC-40 index (FR:PX1 3,623, -3.32, -0.09%) down 0.4% at 3,611.21 and the U.K. FTSE 100 index (UK:UKX 5,188, -13.68, -0.26%) down 0.5% at 5,178.57. Asian shares were mixed, while U.S. stock futures were pointing to a slight rebound on Wall Street, with Dow Jones Industrial Average futures up 14 points. One firm stood out in Tuesday's trading session -- British Sky Broadcasting (UK:BSY 715.50, +115.00, +19.15%) whose shares soared 19.2% to 716 pence. Media group News Corporation (NWS 15.45, -0.14, -0.90%) , which is the parent of MarketWatch, said that it has proposed to buy the shares that it does not own in British Sky Broadcasting for 700 pence a share, or 7.8 billion pounds ($11.5 billion) in total. News Corp. said that it originally offered 675 pence a share on June 10 but increased the offer following talks with the firm. BSkyB's independent directors said Tuesday that they consider the terms of the proposal to significantly undervalue BSkyB and would not recommend an offer if it were made at 700 pence per share. The independent directors said they have indicated to News Corp. that they would have been prepared to support a proposal if it would have delivered value in excess of 800 pence per share.

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