Comcast jumps into the fray for Sky with $31 billion bid
Comcast jumped into the fray for Sky Plc, challenging Rupert Murdoch’s 21 Century Fox Inc. and Walt Disney Co. with a cash offer valuing the business at £22.1 billion ($31 billion) and opening the possibility of a bidding contest for the UK’s biggest pay-TV company.
After months spent scoping out Sky’s technology platform and content proposition of sports and entertainment across five countries, the owner of NBCUniversal offered £12.50 per Sky share on Tuesday. That exceeds the £10.75 offered by Fox for the 61% stake it doesn’t already own in the European broadcaster by about 16%.
Comcast sprung the offer on Sky Tuesday morning, its timing suggesting it sees an opening to win over UK officials and investors. Fox has been struggling to secure regulatory approval for its bid and some Sky holders have been agitating for a better offer after Disney’s $52.4 billion agreement in December to buy most of Fox’s film and TV assets, including its stake in Sky. Fox would hand full control of Sky to Disney if its takeover is successful.
Fox will be furious after Comcast’s bid, said Crispin Odey, Murdoch’s former son-in-law and founder of hedge fund manager Odey Asset Management, which owns a 0.8% stake in Sky according to data compiled by Bloomberg. “This is tanks on their lawn,” said Odey, who has
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been pushing for a higher offer for Sky. Sky shares rose as much as 20% to 1,323.50 pence, higher than both bids and the most since Fox’s offer in December 2016.
Given the strategic importance of Sky to Fox and Disney, a counter-offer well above Comcast’s is now very likely, said Jerry Dellis, an analyst at Jefferies in London. Disney chief executive officer Bob Iger called Sky a “crown jewel” among Fox assets in a December interview with Bloomberg TV.
Sky declined to comment while representatives for Fox and Disney didn’t immediately respond to requests for comment.
Comcast chairman and chief executive officer Brian Roberts said he’s prepared for the Murdochs to spurn Comcast’s advance. The proposal is structured so that Comcast will be successful as long as it brings more than 50% of Sky shareholders to its side. “We’d prefer 100% but it’s not a condition,” Roberts said on a conference call.