Comcast spoils the party
BRIAN Roberts of £117bn media colossus Comcast has been looking to gatecrash the carefully orchestrated merger plans of Disney and Rupert Murdoch’s 21st Century Fox since late last year.
He has now come up with a cleverly targeted offer of £22bn for Sky which may well wreck the bromance between Bob Iger of Disney and 21st Century Fox’s Rupert Murdoch.
Comcast has used the regulatory cloud over the 21st Century Fox bid for Sky to come up with a package of add-ons which matches everything the Murdochs have been required to concede.
It has committed not to interfere with Sky News for a decade; an independent board; to keep Sky’s headquarters in Osterley, west London; and to continue investing for another five years. It is seeking to avoid the regulatory and political opprobrium which has accompanied many recent bids, particularly those from overseas.
The view from Sky is that, as an all-cash bid from a company with strong cash flows and insignificant debt, it is a more seductive offer than that on the table and carries a 16pc premium. Moreover, within Sky News there is relief that Comcast, with a history of running the NBC family of news channels, is now in the driving seat rather than Disney. The latter is much more interested in Sky technology and creative platforms than pumping out news.
Roberts has to convince his own minority investors that Sky is a great catch and that requires some hefty synergy promises.
There are obvious things that could be done, such as joint production of the Masters golf tournament and future Olympics. There may also be ways of bringing together more closely the currently segregated Premier League football rights, a mainstay of Sky, but also watched widely on NBC.
Indeed, anyone with computer nous and a willingness to engage in some minor piracy can access the 3pm Saturday kick-offs on NBC closed off to European subscribers. There will be no shortcuts for Comcast, which must jump through the media plurality, fit and proper person and European competition hoops before any go-ahead.
It has been criticised in the past for lousy service to its American cable customers but we are assured this has been addressed.
Disney and Fox have some hard thinking to do about whether the economics of matching the Comcast bid makes any sense and how best to re- engineer their own transaction. The market senses that there is more to come and Sky’s shares are trading above Comcast’s £13-per- share offer, at 1359p.
Whatever past baggage Rupert Murdoch and his family may carry, no one can fault them for creating Britain’s most valuable and innovative media property.
Pity it now has to be sacrificed but, in the age of £6bn production budgets at Netflix, independence is no longer viable.
Doing the splits
ALISON Brittain and the Whitbread board, now under the direction of chairman Adam Crozier, have bitten the bullet and decided to spin off Costa into a separate entity.
We are assured this always has been the grand plan but with activist investors Sachem Head nipping at Whitbread’s heels and joined by Elliott Advisors, the 275-yearold firm has decided it has little choice.
What Whitbread wants is more time to complete the divorce and to show the benefits of its digitalisation and the first fruits of its global strategy, in the shape of budget hotels in Germany and a directly owned chain of coffee shops in China.
That seems sensible and it would be nice to think that long holders of Whitbread, such as Blackrock and Aberdeen, might see the value of patience and not allow themselves to be pushed around by the likes of Elliott, which wants a quick killing.
After the betrayal of GKN by Aviva Investors and Legal & General, long funds should show backbone and allow Whitbread the time it needs.
Reckless greed
THAT Jeff Fairburn survives as chief executive of Persimmon is a great mystery.
His reduced £75m bonus plan remains outrageous and he has been given a bloody nose by investors, some 48.5pc of whom voted against his pay deal, with another 20pc abstaining.
The reputation of Persimmon has been damaged forever and Fairburn’s stubbornness in the face of criticism disgraces a vital industry. If there were any honour he would resign immediately.