Comcast launches rival £22 billion bid for Sky
Comcast said its cash offer is worth £12.50 a share – a 16% hike on the £10.75 a share offered by 21st Century Fox.
US media giant Comcast has unveiled a £22 billion rival bid for Sky in a move that threatens Rupert Murdoch’s deal to take full control of the pay-TV group.
Comcast said its cash offer is worth £12.50 a share – a 16% hike on the £10.75 a share offered by 21st Century Fox under its £11.7 billion deal to buy the remaining 61% of Sky is does not already own.
The group added that it plans to agree a raft of legally-binding commitments over Sky and its investment in the UK, in particular for Sky News, while it also said it would commit to keeping the group’s Osterley headquarters for at least five years.
The bid is yet to be given the backing of the Sky board, but Comcast said it was in talks with the Sky Independent Committee “with a view to obtaining a future recommendation of the acquisition”.
Brian Roberts, chairman and chief executive of Comcast, said: “With its 23 million retail customers, leading positions in the UK, Italy, and Germany, and its history of strong financial performance, we see significant opportunities for growth by combining our businesses.”
He added: “We also understand the role that Sky plays in UK society and in its customers’ lives and we are determined to be responsible and trusted owners of Sky.”
Sky withdrew its recommendation for the Fox deal following Comcast’s offer, but stressed that both bids are “subject to pre-conditions and neither offer is currently capable of being put to shareholders”.
It added its independent committee will “co-operate fully” with both suitors.
Mr Murdoch’s 21st Century Fox said it was “considering its options”, but “remains committed to its recommended cash offer for Sky”.
Sky’s shares raced 4% higher as the move by Comcast sets the stage for a possible bidding war for Sky.
Fox already owns 39% of Sky and made a bid to take full control of the group in December 2016.
But the UK competition watchdog has raised a host of concerns over the Fox acquisition, while since then, Walt Disney has also agreed to snap up a raft of Fox assets including the Sky 39% stake.
Comcast’s offer price is the same as its proposal first put forward in February.
It said it would expect the deal to complete before the end of 2018.
As part of its post-offer assurances, the group confirmed plans to establish a Sky News board, which will be maintained for at least 10 years, as well as promising annual expenditure on Sky News will be at least equal to that of the past financial year.
Comcast also said it will give legally-binding commitments to maintain editorial independence at Sky News.
And in a bid to head off any competition concerns, the group said it would vow not to acquire any majority stake in any UK newspapers for five years.
Comcast, which owns cable channels MSNBC and CNBC, has already said it believes its approach would escape concerns over media plurality because of its “minimal presence” in UK media.
Sky News has become a flash point in the Fox’s bid due to competition fears centring on Mr Murdoch’s ownership of The Sun, The Times and The Sunday Times newspapers.
A tie-up between the two would create a business with around 52 million customers and give Comcast a platform for growth across Europe.
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.