Comcast offers to buy Sky in $30 billion challenge to Fox
LONDON: 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 wi l l be furious af ter 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 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 counteroffer well above Comcast’s is now very likely, said Jerry Dellis, an analyst at Jefferies in London. Disney CEO Bob Iger called Sky a “crown jewel” among Fox assets in a December interview with Bloomberg TV. “It’s obviously a huge gauntlet that’s been laid down to the Murdochs in relation to their preexisting offer,” said Alice Enders, head of research at Enders Analysis.
Sky’s success at the Premier League soccer rights auction this month made it more desirable, she said. “Sky is a very attractive business.” Sky declined to comment while representatives for Fox and Disney didn’t immediately respond to requests for comment.