Com­cast chal­lenges Mur­doch with $31 bil­lion of­fer to buy Sky

Pro­posed deal is higher than Fox’s agreed of­fer send­ing broad­caster stock surg­ing

Arab News - - BUSINESS -

LON­DON: Com­cast Corp, the big­gest ca­ble op­er­a­tor in the US, of­fered on Tues­day to pay $31 bil­lion to buy Sky, chal­leng­ing Ru­pert Mur­doch’s Fox and Bob Iger’s Walt Dis­ney for the Euro­pean pay-TV jewel.

Com­cast, a $184 bil­lion me­dia gi­ant which owns NBC and Uni­ver­sal Pic­tures, said it was of­fer­ing £12.50 per share, sig­nif­i­cantly higher than the £10.75 per share agreed by Fox. Shares in Sky soared 18 per­cent.

Present in 23 mil­lion homes across Europe and known for its tech­no­log­i­cal in­no­va­tion, Bri­tain’s Sky has al­ready agreed to be sold to Mur­doch’s 21st Cen­tury Fox but the takeover has been de­layed by con­cerns over the me­dia ty­coon’s in­flu­ence in Bri­tain.

That has com­pli­cated a sep­a­rate $52 bil­lion deal by Dis­ney to buy Fox as­sets in­clud­ing Sky.

“Sky and Com­cast are a per­fect fit: we are both lead­ers in cre­at­ing and dis­tribut­ing con­tent,” Com­cast CEO Brian L. Roberts, 58, said. “We think Sky is an out­stand­ing com­pany.”

The lat­est round of ma­jor deals in­di­cates the pres­sures be­ing felt by tra­di­tional ca­ble tele­vi­sion net­works which have been los­ing cus­tomers to stream­ing ser­vices such as Net­flix Inc. and Ama­zon.com Inc.

Shares in Sky rose to £13.08 as in­vestors hoped the en­su­ing bid bat­tle would push both sides to of­fer a higher price.

“The ini­tial share price re­ac­tion sug­gests that this story has fur­ther to run, with Sky’s price leap­ing above the level of the al­ready in­creased Com­cast of­fer,” said Richard Hunter, head of mar­kets at In­ter­ac­tive In­vestor.

The pro­posed of­fer pits Com­cast’s Roberts against Mur­doch, the 86-year-old ty­coon who helped to launch Sky in Bri­tain, and who has been edg­ing to­ward fi­nally get­ting his hands on Sky af­ter he first bid for the com­pany eight years ago.

It also pits Roberts against Dis­ney’s Iger, a long-time ri­val af­ter Com­cast tried to buy Dis­ney for $54 bil­lion in 2004.

Com­cast said it had not yet en­gaged with Sky over the pro­posal and nearly 90 min­utes af­ter the state­ment came out, Sky was yet to re­spond.

“We would like to own the whole of Sky and we will be look­ing to ac­quire over 50 per­cent of the Sky shares,” Com­cast CEO Roberts said.

“In­no­va­tion is at the heart of what we do: By com­bin­ing the two com­pa­nies we cre­ate sig­nif­i­cant op­por­tu­ni­ties for growth,” he said.

Sky’s chair­man is Mur­doch’s son James, who is the chief ex­ec­u­tive of 21st Cen­tury Fox, so Com­cast will have to gain the sup­port of the in­de­pen­dent share­hold­ers for its bet­ter of­fer if it does not make a hos­tile bid.

Fox agreed to buy the 61 per­cent of Sky it did not al­ready own in De­cem­ber 2016 but the takeover has been re­peat­edly held up by reg­u­la­tory con­cerns that Mur­doch con­trols too much me­dia in Bri­tain.

Some Sky share­hold­ers have also started to com­plain that the of­fer was too low. In De­cem­ber, hedge fund man­ager Crispin Odey ar­gued that Sky was be­ing sold too cheaply.

Bri­tain’s com­pe­ti­tion reg­u­la­tor said in Jan­uary that Mur­doch’s planned takeover should be blocked un­less a way was found to pre­vent him from in­flu­enc­ing the net­work’s news op­er­a­tion, Sky News.

The Com­pe­ti­tion and Mar­kets Author­ity (CMA) said that the deal would give Mur­doch too much in­flu­ence and so would not be in the pub­lic in­ter­est.

Mur­doch’s news out­lets are watched, read or heard by nearly a third of Bri­tons and have a com­bined share of pub­lic news con­sump­tion that is sig­nif­i­cantly greater than all other news providers, ex­cept the BBC and com­mer­cial TV news provider ITN.

Last week, Fox made fur­ther con­ces­sions, with a prom­ise to main­tain and fund a fully in­de­pen­dent Sky­branded news ser­vice for 10 years.

Com­cast said it had only a min­i­mal pres­ence in the Bri­tish me­dia mar­ket and did not see any plu­ral­ity con­cerns over its pro­posal.

Com­cast said it rec­og­nized that Sky News was an “in­valu­able part of the UK news land­scape” and it in­tended to main­tain Sky News’ ex­ist­ing brand and cul­ture, as well as its strong track record for high­qual­ity im­par­tial news and ad­her­ence to broad­cast­ing stan­dards.

“Our strong mar­ket po­si­tions are com­ple­men­tary with Sky’s lead­er­ship in Europe en­hanc­ing our pre­em­i­nent po­si­tion in the US,” Com­cast’s Roberts said.

US ca­ble gi­ant Com­cast has of­fered more than $31 bil­lion to buy pan-Euro­pean satel­lite TV group Sky. (AFP)

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