Issue of the week: Comcast’s bid for Sky
The US cable giant’s surprise tilt at Sky looks set to initiate the mother of all takeover battles
“Poor old Rupert Murdoch,” said Nils Pratley in The Guardian. “A media titan can’t even break up his own empire these days without gatecrashers turning up to spoil the show.” The US cable TV giant Comcast’s £22bn bid for Sky is “bold, aggressive and cutely timed” – all qualities “associated with Murdoch in his pomp”. Everything now points to a dramatic “shoot-out” for the satellite broadcaster. The open question is who will go head-to-head with Comcast. Will it be Murdoch’s 21st Century Fox (which owns 39% of Sky)? Or will Disney, which is in the process of trying to buy most of Fox, including its Sky stake, “make a direct counter-offer”? Whatever the outcome, this cannot be the ending Murdoch expected. “He assumed Fox’s stake in Sky meant he was the only possible bidder. He was wrong.”
Comcast’s £12.50 per share offer for Sky is 16% higher than the sum Fox tabled, yet the stock immediately shot up to £13.30 in anticipation that the bidding will go higher. That’s great news for shareholders, said James Moore in The Independent. “It is now very clear that Murdoch’s original bid grossly undervalued the company,” which has “shown off sparkling results” and recently got “its hands on the lion’s share of Premiership football for 14% less than it paid last time”. It must be particularly “galling” for Murdoch that it is happening thanks to the UK regulatory authorities: the “buck-passing and procrastinating” over his Sky bid “opened the door for Comcast”. Murdoch might also point a finger at a London cab driver and a Sky store assistant, said the FT. When the cabby was asked by an American passenger last November what he thought of the UK pay-tv market, he can’t have known that his answer would sway a takeover deal worth billions. But Comcast boss Brian Roberts was so struck by his detailed knowledge of “the differences between Virgin and Sky” – and so “terribly impressed” by an in-store demo of Sky’s latest set-top box – that he subsequently identified Sky as his company’s next target.
Comcast’s currently “slim” UK operations mean its bid should raise few competition concerns, said Liam Proud on Reuters Breakingviews. But how the $183bn group’s own shareholders will benefit is unclear. The offer “contains lots of details about supporting creative industries and young people” in Britain, “but little about financial returns”. That may be because, in this battle of global titans, Roberts’s “real objective” is to upset the $52bn Disney-fox tie-up. The stage is set for “the mother of all bid battles”, said James Moore. “Big egos, big money, big business and the future of broadcasting in Britain – this one has it all.”