United States cable giant Comcast in multi-billion euro bid for Sky

Mar 02, 2018, 02:36
United States cable giant Comcast in multi-billion euro bid for Sky

Two of Sky's big institutional backers have predicted a bidding war after Comcast's £22bn offer to buy the United Kingdom media behemoth, according to reports. Disney CEO Bob Iger called Sky a "crown jewel" among Fox assets in a December interview with Bloomberg TV.

The offer will nearly certainly lead to an all-out bidding war for the company.

A Sky purchase would transform the largely USA -centric Comcast into a truly worldwide company.

Analysts from Liberum say there is "a strong rationale" for Comcast to buy Sky as it would give it immediate leading positions in pay-TV markets in the UK, Germany and Italy, as well as a presence in Spain.

"We intend to maintain and enhance Sky's business. Adding Sky to the Comcast family of businesses will increase our global revenues from 9% to 25% of Company revenues", he said.

It also threatens to drag the Murdoch family into a full-blown takeover tussle, adding to the media mogul's frustrations after seeing Fox struggle to buy the 61% of Sky it does not already own due to regulatory hurdles.

Fox's Sky bid has not been viewed favourably by the UK's competition authority, which in January provisionally found that it would not be in the public interest.

Disney and 21st Century Fox did not immediately respond to requests for comment.

USA cable giant Comcast has put a rival offer of £22bn for Sky, in an attempt to snatch the company from the grasp of media tycoon Rupert Murdoch.

However, Comcast has said it would like to own the whole of Sky.

The announcement saw Sky's share price soar. As of 3:10 p.m. local time, 10:10 a.m. It closed the day up 20.4% at £13.30. At that time, Comcast's stock was down more than 5 percent in early US trading, while Walt Disney's stock was down 2.8 percent.

Comcast reckons its expertise funnelling TV shows, sports and movies directly to homes makes it a better owner of Sky. It already has a strong presence in the United Kingdom on the programming side. It needs the approval of regulators in London. To add, the company says that it's "a significant premium to the 21CF price now recommended", and that "We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares".

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.

Shadow digital, culture, media and sport secretary Tom Watson said: "The UK's media plurality and Sky's high broadcasting standards are at stake in this bidding process".

He said: "The UK is and will remain a great place to do business". He added that Europe overall is a "highly attractive market". He concluded: "We would become a unique leader in entertainment and technology".

"The successful conclusion of the Premiership football rights auction has moved the dial for Sky, which secured more games at a lower cost than last time around".

"Unfortunately, the bad outweighs the good", he said. Roberts' interest in the broadcaster firmed up after an hour-long demonstration of its flagship Sky Q TV product during a trip at the end of previous year. First of all, Dish doesn't own any content.

The media mogul is reported widely to have a strong affection and friendship with United States president Donald Trump with whom he is said to have weekly telephone communications.

It comes after the United Kingdom competition watchdog found Fox's deal to buy Sky was "not in the public interest".

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).

Comcast boss Brian Roberts is driving a Sky-shaped wedge between Walt Disney and Twenty-First Century Fox.

The decision by Comcast to enter a bidding war is expected to be welcomed by the United Kingdom government who fear the offer by Fox would not be in the public interest.

"Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth".

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