Comcast/disney/fox/sky: winners and losers
The long battle for Rupert Murdoch’s media empire is “drawing to a close” – and it looks like being “a thriller without a final twist”, said Nils Pratley in The Guardian. The US cable giant Comcast has ended its battle with rival Disney in the £55bn fight for 21st Century Fox, “conceding, in effect, that the bidding had become too hot”. The bulk of Murdoch’s empire is thus “destined for Disney”, assuming US regulators approve. The action has now shifted to Europe and “the scrap for Sky”, which Comcast currently leads with a £26bn (£14.75-per-share) offer. “The open question” is whether Fox, which already owns 39% of the broadcaster, “will return with a better bid”.
Comcast’s concession to Disney ends “one of the biggest bidding wars in media history”, which raised the price of Fox’s assets by nearly $20bn, said the FT. Both players sought “Fox as a way to bulk up in the face of digital disrupters” such as Netflix and Amazon. The fact that Comcast’s shares climbed 3% on news of its retreat showed its investors’ relief that “the bidding would not go any higher”.
“In any bidding war, the biggest loser is always the overpaying winner,” said Jeremy Warner in The Sunday Telegraph. Comcast’s boss, Brian Roberts, should remember that as he sizes up Sky. Thanks to its “accomplished” boss, Jeremy Darroch, Sky has become an innovative, “genuinely pan-european” pay-tv company. But today’s bidders “are almost certainly running away with themselves in their determination to win the prize”. Only 18 months ago, Sky’s shares were woefully undervalued at £7. Yet the pendulum has surely swung too far: “it is rare to unheard of for a company to command a bid premium of more than 100%”. Beware “the winner’s curse”.