Sky falls in on Murdoch as he loses the richest poker game in history
He’s outbid by US cable giant in dramatic £30bn auction for TV firm he set up 28 years ago
RUPERT MURDOCH was set to lose control of Sky TV last night as he dramatically lost a multi-billionpound poker game after being outbid by US cable giant Comcast.
The bid for the British company by Murdoch’s 21st Century Fox of £15.67 per share, valuing the company at £27 billion fell far short of Comcast’s bid of £17.28 per share, valuing Sky at over £30 billion.
The announcement came after a day-long secret auction conducted by Britain’s Takeover Panel, in which bidding went to the maximum three rounds.
At the Central London HQ of Robey Warshaw, one of the Comcast advisers on the bid, businessmen emerged shortly after the 7pm announcement declaring ‘victory’. Sky’s independent directors last night recommended Comcast’s bid to shareholders, who will have to vote to approve the deal.
Brian Roberts, chairman and chief executive of Comcast, said last night: ‘This is a great day for Comcast. We couldn’t be more excited by the opportunities in front of us. We now encourage Sky shareholders to accept our offer.’
Owning Sky, with its 23 million subscribers, will give Comcast the lucrative rights to broadcast Premier League football.
Yesterday’s auction was a poker game with the highest stakes imaginable: the future of Sky TV.
In what one source described as a ‘deep blackout’, the rival teams of bankers from Fox and Comcast were hunkered down behind closed doors across London from Friday evening in ‘war rooms’ as they prepared their bids.
As global markets awaited the result of one of the most astonishing takeover dramas ever, bankers, media barons and lawyers sweated out the day, crunching the figures in shirtsleeves. Some City insiders compared the nerve-jangling tension to Sky’s own high-octane hedge fund drama Billions.
The quick-fire auction was hosted by the Takeover Panel after both Fox and Comcast refused to declare a final offer for Sky.
It was believed Mr Murdoch, 87, was controlling his operation from his majestic 20- room top- floor apartment on Fifth Avenue, overlooking New York’s Central Park.
The other major player in the drama was the Walt Disney Company and its charismatic chairman and chief executive Bob Iger, 67, also believed to be closely monitoring events from his palatial Los Angeles home.
His input was crucial as Disney is in the process of buying Fox, so Iger would have to give his final approval for the Fox offer.
Iger, touted as a potential US presidential candidate, was victorious earlier this year in the £55 billion takeover of the bulk of 21st Century Fox’s entertainment assets, including its 39 per cent stake in Sky.
Fox had been trying to take over the 61 per cent of Sky it does not already own for years. In 2011, Fox abandoned an effort to take over the full company following a phonehacking scandal at the Murdochowned News of the World. In
Nerve-jangling tensions in City’s ‘war rooms’
December 2016, Murdoch tried again, offering £10.75 per share. But Fox faced questions over whether it was a ‘fit and proper’ owner and whether the deal would give Murdoch too much power. Regulators eventually agreed that the sale could go through as long as Sky News was spun off in an effort to protect its editorial integrity.
Enter Brian Roberts, 59, the American billionaire boss of Comcast, who lost out to Disney in the battle for Fox, but then – partly inspired by a chat with a London cabbie who gave him chapter and verse on the rival services of Sky and Virgin Media – decided to launch a counterbid for Sky, eventually reaching £26 billion for the entire company.
The auction began on Friday evening after London markets closed, with Fox, whose earlier bid stood at £24.5 billion, allowed to go first. The first bid was emailed and telephoned into the Takeover Panel’s City HQ, then shared immediately with Comcast.
Some time later yesterday, in the second round, Comcast was given its chance to improve on its existing £26 billion bid – which the Takeover Panel also passed on to Fox.
A source in the Comcast camp told the MoS the tension was palpable as the afternoon light faded. ‘They don’t want to send any messages to anyone about what they are doing. There’s a deep blackout going on. There’s just so much as stake,’ he said.
Justin Urquhart Stewart, of City broker Seven Investment Manage-
‘It’s a battle for control of global media world’
ment, compared the bidding battle to TV drama Billions. ‘There are certainly characters in there that have distinct similarities,’ he said. ‘They should have made Billions after this – because actually what [we’re seeing here is people] reenacting the television series.’
And Laith Khalaf, a senior analyst at Hargreaves Lansdown, com- pared the bidding war to Sky’s Game Of Thrones, adding: ‘It’s a battle for control of the global media world.’
City analyst David Buik said bankers on both sides of the deal would be ‘salivating at the chops’ as they await payment for their work on the auction.
One of the senior Comcast advisors, Sir Simon Robey, founder of mergers advisory firm Robey Warshaw, was spotted leading his team at his office in exclusive St James’s Place, SW1, yesterday.
Sir Simon, 58, is one of the Square Mile’s most celebrated ‘rainmakers’ – so-called for their ability to pull off deals for Britain’s largest companies. Also spotted were his fellow partners at the firm, Simon Warshaw and Philip Apostolides.
Staff could be seen drawing window blinds closed as the auction reached its latter stages.
Yesterday evening came the decisive third round, with each side having to prepare their final bid.
Pitch too high, and the company would be saddled with a damaging overpayment for the asset; bid too low, and Sky – described as the ‘jewel in the crown’ of 21st Century Fox by Bob Iger of Disney – could pass to its deadliest rival.
Hedge funds’ £1 billion jackpot: Financial Mail: Page 93