Comcast Starts A Bidding War With Fox For European Broadcaster Sky

by Ben Pena April 26, 2018, 6:49
Comcast Starts A Bidding War With Fox For European Broadcaster Sky

Morningstar analyst Allan Nichols said Comcast's offer fully valued Sky, and any increase would be negative for Comcast, Disney or Fox shareholders.

Sky's independent directors said they welcomed Comcast's $17.4 (12.50 pound) per share bid and would now engage with both Comcast and Fox.

The situation is further complicated by Fox's £37.5bn agreement with Disney for the entertainment and theme park company to buy most of its film and television assets, including its stake in Sky.

Comcast has formalized its bid for European broadcaster Sky, a move that sets up a battle royale with rival U.S. powerhouse 21st Century Fox. And Fox has been attempting to get all of Sky which in turn would flip it to Disney. "Disney can obviously afford it".

Comcast's potential disruption of Murdoch's plans comes almost seven years after the media mogul withdrew a previous bid for full control of Sky, an offer that was derailed by the phone-hacking scandal that resulted in the closure of his newspaper The News of the World.

The American based cable operator, Comcast has formally put a bid of £22 billion forward to acquire Sky.

The offer comes over a year after Fox made its initial bid to take control of the 61% of Sky that it doesn't already own in a £11.7bn deal, which has faltered, however, after United Kingdom regulator the Competition and Markets Authority found it was not in the public interest, citing concerns over media plurality.

Its takeover play further complicates the Fox/Sky saga, with Walt Disney also recently being told by Britain's Takeover Panel that it must bid for the whole of Sky even if Rupert Murdoch's offer is blocked. A phone-hacking scandal at Murdoch's newspapers derailed his first bid for the company in 2011.

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Fox has since proposed several measures to try to assuage the regulator's fears over the Murdochs' potential influence.

Comcast's offer includes commitments to retaining the independence of Sky News and a pledge not to acquire any major interest in a United Kingdom newspaper for the next five years.

Other TCI officials have also had conversations with Comcast's investor-relations team that left Comcast executives with the clear indication that TCI wants the cable giant to continue its pursuit of Fox, the people said.

Roberts said Comcast had been built through bold investments since it was founded by his father in 1963.

Comcast said its bid came with a series of legally binding commitments on Sky ownership and United Kingdom investment. About a quarter of Comcast's sales would come from overseas after a successful acquisition of Sky, compared to 9 percent now.

Comcast said it anticipates realizing about $500 million in operating synergies, with about $300 million on the expense side and $200 million in revenue.

Comcast shares have declined 22% since late January, wiping out more than $40 billion in market value. The company lost 96,000 video subscribers, compared with an estimate for a 60,800 drop.

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