Comcast boosts Sky bid to $34M, topping Fox offer in global standoff
Philadelphia-based Comcast, the largest U.S. cable company, is now offering 14.75 pounds ($19.52) a share for Sky, valuing Britain's top pay-TV provider at 26 billion pounds ($34.4 billion). That compares with a 14 pound-a-share ($18.53) proposal from Fox.
Comcast Corp. boosted its bid for Europe's Sky TV to $34 billion on Wednesday evening in its global I-can-do-you-one-better takeover battle with Rupert Murdoch.
Comcast acted swiftly after Murdoch's 21st Century Fox announced Wednesday morning that it would pay the equivalent of $32.5 billion for Sky, topping Comcast's $31 billion offer for a business that many believe could be facing modest future growth in its core satellite-television business as Europeans look more to streaming entertainment. A Fox spokesman acknowledged the bid, but had no comment.
Sky, based in the United Kingdom, has more than 20 million subscribers in several European countries, in addition to a content arm that includes Sky News.
The bidding for Sky and the broader protracted fight over ownership of Murdoch's entertainment assets between Comcast and the Walt Disney Co. seems no closer to a conclusion after Wednesday actions, which were surprising only in that both Comcast and Fox seemed eager to get the fight on.
"It's by no means a knockout bid," Jonathan Chaplin, an analyst with New Street Research, said Wednesday evening of Comcast's offer. "It's above Fox's bid, but [Comcast] did not go high enough so that it could thwart Fox coming back."
Chaplin and other analysts are hoping that Fox, Comcast, and Disney can back off a bidding war over Murdoch's entertainment empire, with Comcast taking Sky for $34 billion and Disney taking the rest of the Fox entertainment assets for $71 billion. Those assets include Fox's Hollywood studios, content library, cable channels, international networks, and 39 percent stake in Sky.
Fox is seeking to acquire the remaining 61 percent of Sky, valuing the company at $32.5 billion, and hand it over to Disney. Comcast wants to disrupt those plans. Comcast said Wednesday that Sky's independent board committee supports its offer, which it plans to mail to Sky shareholders within days.
Comcast has said that Sky could take the U.S.-bound cable and internet giant into global markets.
Chaplin said he fears that Comcast could overpay for Sky and possibly Fox, leading to tough ramifications for the company's stock price.
But Disney and Fox are determined to keep their deal together — Murdoch has favored Disney in negotiations over the sale of 21st Century Fox assets, including Fox's stake in Sky. Both Fox and Disney have scheduled special shareholder meetings for July 27 in New York to approve the cash-and-stock deal to sell the Fox assets to Disney. Many expect Comcast to counter Disney's $71 billion.