Comcast tenders £22bn bid for UK's Sky

by Ben Pena March 2, 2018, 1:20
Comcast tenders £22bn bid for UK's Sky

Fox has already proposed a deal to buy the remainder of Sky that it doesn't already own for a cost of £18.5 billion. On a trip to the U.K.in November with Dave Watson, head of Comcast Cable, Roberts suggested jumping in a taxi and going to a mall to get an in-store demo of Sky's products.

Unveiling the bid (PDF), Comcast CEO Brian Roberts described Sky as "an outstanding company" delivering "a fantastic viewing experience", which was a "consistent innovator".

Fox now owns more than a third of Sky's shares, and British regulators have expressed concerns about giving the Murdoch family even more control over their media landscape.

It's now thought Disney could make its own counter bid in order to buy Sky outright, which would put the proposed deal with Fox in jeopardy.

The sudden arrival of Comcast creates some hard choices for Iger: Should he be content with Fox minus Sky, or should he entertain a costly bidding war with the US cable company?

Fox has already agreed on paper to sell its stake in Sky to Disney as part of a $52.4 billion (£37.5 billion) package of film and TV assets. Iger called Sky a "crown jewel" among Fox assets in a December interview with Bloomberg TV.

"Comcast intends to use Sky as a platform for growth in Europe". Shares in Sky surged by more than 20 per cent on Tuesday morning, taking the market capitalisation of the company to around £23bn.

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Alex DeGroote, a media analyst for Cenkos Security who has been following Sky for 15 years, said the market's early reaction - Sky shares soared 21 percent on news of the bid - implies that investors think there will be a bidding war.

"We already have a strong presence in London through our NBCUniversal global operations, and we intend to maintain Sky's United Kingdom headquarters", Roberts continued.

Comcast, which owns the Downton Abbey brand, is the biggest U.S. cable TV firm. It also said that it would continue "investment in employees' professional development across the UK" and that it was committed to Sky's local community programmes to inspire more people to get involved in sports.

"The notion that Comcast might make a topping bid for Fox has weighed heavily on Comcast shares, which have entirely missed the market rebound in the days since their continued interest was first reported".

The big-name mergers are getting bigger in value with Comcast dropping a bomb that it is ready to pay $31 billion to takeover Sky. Since no firm offer has been made at this point, shareholders are advised to take no action.

Walt Disney Co strikes a deal to buy film, television and global businesses from Murdoch's Fox for $52.4 billion in stock, including its holdings in Sky. It also indicated that if the deal goes through it would, operationally, keep many things the same at Sky.

"Comcast must demonstrate its commitment to plurality by guaranteeing a properly funded Sky News for at least a decade as a key condition of the sale".

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