Universal ditches Fox offer to ramp up its hunt for Sky

THE owner of Universal Studios has dropped out of the race to buy 21st Century Fox to focus on a £26bn takeover of Sky.

Comcast is walking away from a bidding war with Disney, which has offered £55bn for Fox’s entertainment businesses.

Both companies were vying for the assets, which include Fox’s film and television studios, National Geographic, a 30pc stake in video streaming website Hulu and Indian network Star. Fox is also still seeking to buy the 61pc of Sky it does not already own.

Sky is seen as valuable by both Disney and Comcast because of the direct access it would give them to some 23m customers across Europe.

In a statement, Comcast said: ‘We do not intend to pursue further the acquisition of the 21st Century Fox assets and, instead, will focus on our recommended offer for Sky.’

Brian Roberts, the firm’s chief executive and chairman, added: ‘I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.’

After the announcement, Sky shares fell 1.5pc, or 22.5p, to 1508.5p. It is the latest twist in a takeover saga engulfing the UK broadcaster.

Fox recently put down a £24.5bn offer for Sky but was outbid by Comcast hours later. All eyes are now on Fox to see if it will raise its bid again.

The Government has cleared the way for both suitors, with new Culture Secretary Jeremy Wright giving his approval for Fox’s takeover this month.

However, to address regulatory concerns, if Fox is successful it would have to spinoff Sky News from the rest of the business and continue to fund it for a period of 15 years.

Ministers had already waved through Comcast’s approach.

As the battle for Sky continued, it also emerged that bankers, lawyers and PR firms are poised for a bumper £339m pay day if Comcast triumphs.

Documents revealed that Bank of America Merrill Lynch, Morgan Stanley, Wells Fargo and Barclays will rake in fees if the £26bn deal goes through.

Those offering financial and corporate broking advice will receive up to £38m from Comcast alone, and those billing for financial arrangements are set to net a cool £170m.

Comcast’s PR firm, Tulchan, will share in £7.7m earmarked for advice, while lawyers Freshfields and Davis Polk will pocket part of the £24m linked to legal costs. Tax advisers are set for a £636,000 payout.

In total, Comcast is expecting to pay up to £243m. Sky will pay out nearly £96m.