Comcast challenges 21st Century Fox's bid to buy Sky

Eileen GuzmanMar 02, 2018

The biggest cable operator in the United States offered on Tuesday to pay $31 billion to buy Sky, challenging Rupert Murdoch's Fox and Bob Iger's Walt Disney for the European pay-TV group.

Fox has long owned a 39 percent stake in Sky and offered to buy the remaining 61 percent in December 2016.

At the time of writing on Tuesday morning, in the immediate wake of the Comcast announcement, Sky's shares have shot up by more than 20% to £13.27, outstripping the price offered by either suitor. "I think we're all very familiar and comfortable in those relationships evolving as ownership and acquisitions occur in media business", he said.

It comes down to this: Sky is a solid European business, and it boasts a huge library of exclusive, premium television content.

During a taxi ride in London, Roberts says a cabbie taught him a lot about the features of Sky; that, combined with a visit to the provider's store, helped seal the deal in his mind. It has 23 million customers and leading positions in the UK, Italy, and Germany.

"At the moment, Comcast does have presence in these markets mainly through its NBC Universal film and TV assets but this would give it a very powerful distribution pan-European network".

The company recently splurged £3.57bn to secure the lion's share of the rights to screen top level English football from the Premier League this month. Fox said that it stays committed to the offer it previously made.

The bid opens a new avenue of competition between Comcast and Disney, which is now in the process of acquiring the entertainment assets of 21st Century Fox for $66bn (£47bn).

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

Ultimately, Fox meant to sell Sky, along with a slew of other media assets, to Disney for $52 billion.

Fox responded by pledging to strengthen the independence of Sky News ahead of the Competition and Markets Authority's final report, which must be submitted by 1 May.

Among Comcast's commitments that were seen as important for a government review of the takeover offer were a promise to keep Sky's West London headquarters campus and to support its continued content investment.

Now the question is what Disney might do next and whether it will be content to let Fox take the lead or initiate a bid of its own for all of Sky.

"Unfortunately, the bad outweighs the good", Moffett said.

If Disney refused, then Fox would have to find the money itself, "which means it is then looking at a loss if Disney did end up acquiring 100% of Sky".

"Sky is going to sky", said Eric Schiffer, chief executive officer of the Los Angeles private equity firm Patriarch Organization. Its rival in that bid was Comcast, which dropped out of the running in mid-December.

Comcast added that it did not believe its offer "should create any media plurality concerns in the UK".

Jerry Dellis, analyst at Jefferies, said the stage was set for a bid battle, with Fox incentivised to counter-bid given the risk of the Disney takeover not being approved.

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