Date
19 December 2018
European pay-TV group Sky could see a bidding war as Comcast has topped a previous offer from Twenty-First Century Fox. Photo: Bloomberg
European pay-TV group Sky could see a bidding war as Comcast has topped a previous offer from Twenty-First Century Fox. Photo: Bloomberg

Comcast launches US$31 bln bid for Sky, taking on Fox

US cable giant Comcast on Wednesday submitted a 22 billion pound (US$30.7 billion) offer for Sky Plc, setting the stage for a battle with Rupert Murdoch’s Twenty-First Century Fox for control of the European pay-TV group.

Sky’s independent directors welcomed Comcast’s 12.50 pound per share bid and said they would now engage with both Comcast and Fox, Reuters reports.

The board cautioned that neither bid could yet be put to shareholders and advised them to take no action for now.

The Comcast bid formalizes an offer first made in February and puts pressure on Fox, which already has a 39-percent stake in Sky, to raise the 10.75 pound per share cash offer it first announced in December 2016, Reuters noted.

Fox said on Wednesday that it remained committed to its offer and was considering its options.

The Fox-Sky deal has been held up by concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well as British newspapers including The Times and The Sun.

The proposed combination has been further complicated by Fox’s agreement to sell many of its TV and film assets to Walt Disney Co, including its stake in Sky, for US$52 billion.

On Wednesday, Sky welcomed commitments Comcast had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel.

Comcast Chairman and CEO Brian Roberts said Sky withdrawing its recommendation on the Fox bid was what the US cable giant wanted to achieve by formalizing its offer on Wednesday.

“The board confirming they are going to focus on the shareholders, that’s the perfect step as far as we are concerned today,” he told reporters.

Sky is chaired by Murdoch’s son James, who played a key role in building the company into a major European broadcaster with operations in Germany, Austria and Italy as well as Britain.

Sky formed a committee of independent directors to consider the bids, given James Murdoch’s role as chief executive of Fox.

The most likely scenario, according to many analysts, is that Fox, with Disney’s blessing, raises its bid, Reuters noted.

Fox has to at least match Comcast’s offer, but analysts estimate a final winning bid could go as high as 14 to 15 pounds per share, the report said.

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RC

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