Comcast formalises £22b bid for Sky

Comcast offering £12.50 per Sky share in an all-cash deal in challenge to Fox

Comcast Corp formalised its £22 billion (Dh113 billion, $30.7 billion) bid for Sky, throwing down the gauntlet to Rupert Murdoch’s 21st Century Fox and Walt Disney as they vie for Britain’s largest pay-TV broadcaster.

Comcast is offering £12.50 per Sky share in an all-cash deal, the Philadelphia-based company said in a statement Wednesday, confirming a proposed offer it made on February 27. The offer is at a 16 per cent premium to Fox’s £10.75-per-share bid for Sky.

Media billionaire Murdoch must now decide whether to increase Fox’s bid to stave off Comcast’s challenge, raising the prospect of a bidding war. Fox, which already has a 39 per cent stake in Sky, plans to sell the broadcaster to Disney as part of their $52.4 billion merger announced in December. In a separate statement, Fox said it remains committed to its offer for Sky and is “currently considering its options,” with a further announcement in due course.

Sky’s shares rose 3 per cent to £13.40 at 11.03am in London. Since Comcast announced its proposed bid in February, Sky’s shares had been trading at more than £13, at a premium to the Comcast price, as investors expected a protracted battle for the UK broadcaster.

“This might elicit the bidding war,” said Alex DeGroote, a media analyst at Cenkos Securities. “We now have a formal proposition, instead of just a suggestion. Sky at these levels is a free bet on the upside.”

Comcast said it expects the Sky deal to generate annual run-rate synergies of around $500 million, through a combination of revenue benefits and recurring cost savings.