Finance

US cable giant Comcast in multi-billion euro bid for Sky

US cable giant Comcast in multi-billion euro bid for Sky

Comcast is offering a $31 billion bid to purchase the European broadcaster Sky, hoping to beat out Disney and 21st Century Fox.

The proposal represents a premium of approximately 16% to the current Twenty-First Century Fox (21CF) offer price of £10.75 for each Sky share that 21CF and its affiliates do not already own and a premium of approximately 13% to the closing price of £11.05 per Sky Share on February 26 2018, being the last business day prior to the date of the announcement.

Brian L. Roberts, Chairman and CEO of Comcast Corporation, said: "We think Sky is an outstanding company".

"Our strong market positions are complimentary with Sky's leadership in Europe enhancing our preeminent position in the US", Comcast's Roberts said.

BBC media editor Amol Rajan says Comcast's bid looks unlikely to face the same regulatory hurdles as Fox's push for full control, "since media plurality, commitment to broadcasting standards, and the political heat around the name Murdoch do not arise".

It's now thought Disney could make its own counter bid in order to buy Sky outright, which would put the proposed deal with Fox in jeopardy.

Comcast's announcement could ignite a bidding war among the US giants hoping to expand their European operations with access to Sky's customer base. That means Fox's 39 percent stake will not be enough to block the deal.

Ultimately, Fox meant to sell Sky, along with a slew of other media assets, to Disney for $52 billion. They spent at least an hour at a Sky store going through every feature and comparing it to Comcast's own X1 platform, which lets subscribers search for movies and TV shows through a Netflix-like user interface and a voice-activated remote control, Roberts said on the call. Shares in Sky surged by more than 20 per cent on Tuesday morning, taking the market capitalisation of the company to around £23bn.

Shareholders feeling short-changed by Murdoch greeted Comcast by sending Sky shares soaring as much as 23 percent.

Comcast would maintain Sky's United Kingdom headquarters and use its entertainment, distribution, and technology to help it "more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape", he said.

Comcast Corporation, owner of CNBC and Universal Pictures, has announced in a press release that the firm has presented a U.S. $31 billion offer to acquire Sky. The deal would boost Comcast's worldwide revenues from nine to 25 percent.

Britain's competition regulator said in January his planned takeover should be blocked unless a way was found to prevent the Australian-born power-broker from influencing Sky's news operation.

He told reporters that he had taken a "keen interest" in Sky for many years.

But regulators are holding up the bid and Sky shareholders could be tempted by a higher offer.

Roberts and Cavanagh lauded Sky News and said it could work together with Comcast's NBC News and MSNBC.

The US giant has since attempted to push out Fox's offer with a rival bid totalling $22.1 Billion. Britain's media minister has said he will give his verdict on Fox's bid for Sky by June 14, giving Comcast a narrow window to get any takeover approval done.

Among Comcast's commitments that were seen as important for a government review of the takeover offer were a promise to keep Sky's West London headquarters campus and to support its continued content investment.


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