Comcast joins Fox in battle for Sky with US$31b offer
US cable giant Comcast joined in the battle for pan-European satellite TV group Sky yesterday, outbidding Rupert Murdoch’s 21st Century Fox, whose takeover ambitions have hit UK government resistance.
In a surprise announcement before the London stock market opened, Comcast said it was making an all-cash offer of 12.50 pounds per share for Sky, or more than 22 billion pounds (US$31 billion) overall.
That is substantially more than the 10.75 pounds per share or 11.4 billion pounds that Fox has offered for the 61 percent of Sky it does not already own.
The announcement — and the prospect of a bidding war — sent Sky’s share price soaring more than 20 percent on the London Stock Exchange.
“We would like to own the whole of Sky and we will be looking to acquire over 50 percent of the Sky shares,” said Comcast chief executive and chairman Brian Roberts. “We are confident that we will be able to receive the necessary regulatory approvals.”
Sky has yet to formally respond to the offer, while analysts eyed even higher offers.
“Sky is a prized asset for Murdoch so this could quickly escalate into a bidding war,” said London Capital Group analyst Jasper Lawler.
The new twist comes after Britain’s competition regulator provisionally ruled that Fox’s offer was “not in the public interest.”
In 2016, 21st Century Fox bid for the nearly two-thirds of Sky it does not own — but a full-takeover had been held up by UK government concerns.
In an effort to get its offer over the line, Fox earlier this month vowed to preserve the editorial independence of Sky News.
That came after Britain’s top competition regulator ruled that the Sky takeover was not in the public interest because of media plurality concerns.
Adding to the uncertainty about Sky’s future ownership, Disney announced in December a US$52.4-billion deal to buy 21st Century Fox. Including debt, the deal is worth US$66.1 billion.
And Comcast, which in December dropped an attempt to acquire 21st Century Fox, is considering relaunching that bid, according to a recent Wall Street Journal report.
Speaking of Sky yesterday, Roberts said: “We think Sky is an outstanding company. It has 23 million customers, leading positions in the UK, Italy and Germany, and is a consistent innovator in its use of technology to deliver its customers a great experience.”
And in a thumbs up to Britain amid Brexit uncertainty, the Comcast CEO added: “The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe.”