Comcast beats Fox with $40 billion offer for Sky in dramatic auction
Comcast bid 17.28 a share for control of Sky, bettering a 15.67-a-share offer by Fox, Britain's takeover panel said
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Business News/ Companies / News/ Comcast beats Fox with $40 billion offer for Sky in dramatic auction
London: Comcast beat Twenty-First Century Fox Inc. in the battle for Sky on Saturday after offering $40 billion in a dramatic auction to decide the fate of the pay-television group.
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The US cable giant bid £17.28 a share for control of London-listed Sky, bettering a £15.67-a-share offer by Fox, Britain’s takeover panel said.
Buying Sky will make Philadelphia-based Comcast, which owns the NBC Network and Universal Pictures, the world’s largest pay-TV operator with around 52 million customers.
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Chairman and chief executive officer (CEO) Brian Roberts has had his eye on Sky as a way to help counter declines in subscribers for traditional cable TV in its core US market as viewers switch to video-on-demand services like Netflix and Amazon.
“This is a great day for Comcast," he said. “This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally."
Comcast’s knock-out offer thwarted Murdoch’s long-held ambition to win control of Sky, and is also a setback for US entertainment giant Walt Disney which would have likely been its ultimate owner.
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Disney has agreed a separate $71 billion deal to buy most of Fox’s film and TV assets, including its existing 39% stake in Sky, and would have taken full ownership after a successful Fox takeover.
Comcast’s final offer was a jump on its bid going into the auction of £14.75, and compares with Sky’s closing price of £15.85 on Friday.
Comcast believed it needed to deliver a knock-out blow given that Fox’s existing stake in Sky gave it a chance of victory if it was a close second to Comcast, two people familiar with the matter said.
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Its final offer— more than double Sky’s share price before Fox made its approach in December 2016— quickly won the backing of Sky’s independent directors on Saturday.
“We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast offer," said Martin Gilbert, chairman of Sky’s independent committee.
Fox noted the recommendation, saying it was considering options for its 39% stake and would make another announcement in due course.
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Fox’s holding, which Comcast’s offer values at more than $15 billion, stems from Murdoch’s role in the creation of the company nearly 30 years ago.
Comcast, which requires 50% plus one share of Sky’s equity to win control, said it was also seeking to buy Sky shares in the market. One fund manager who holds Sky shares said nobody could complain about the Comcast price.
“The question now is if Fox actually sells out and if not can Comcast get to 50%," he said.
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The auction was a dramatic climax to a transatlantic bidding battle waged since February, when Comcast gate-crashed Fox’s takeover of Sky.
It is a blow to 87-year-old Rupert Murdoch, who tried to buy Sky eight years ago only for the bid to collapse in the fallout from a hacking scandal at his British newspaper business.
Sky CEO Jeremy Darroch said this deal is the beginning of a new chapter. “Sky has never stood still, and with Comcast our momentum will only increase."
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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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