Challenge to Murdoch: US giant Comcast also bids for Sky - InfoNews

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Challenge to Murdoch: US giant Comcast also bids for Sky

FILE- In this file photo dated Tuesday Feb. 13, 2018, Comcast Innovation and Technology Center, left, is under construction next to the Comcast Center, right, in Philadelphia, USA. Comcast, the owner of NBC and Universal Pictures, on Tuesday Feb. 27, 2018, launched a bid for British pay TV broadcaster Sky that threatens to thwart the takeover ambitions of media mogul Rupert Murdoch. (AP Photo/Jacqueline Larma, FILE)
February 27, 2018 - 8:41 AM

LONDON - Comcast, the owner of NBC and Universal Pictures, has launched a bid for European pay TV broadcaster Sky that threatens to thwart a rival offer by media mogul Rupert Murdoch' 21st Century Fox.

The move appears not only opportunistic but aimed at disrupting the European expansion of arch-rival Disney, which is currently looking to take over Fox.

Comcast said Tuesday it is offering 22.1 billion pounds ($29.50 billion) for London-based Sky. The proposed cash deal values each Sky share at 12.50 pounds, which represents a 16 per cent premium to the bid made by Murdoch's 21st Century Fox.

Comcast's CEO, Brian Roberts, said his company would use Sky as a platform to grow in Europe.

"We think that Sky would be very valuable to us as we look to expand our presence internationally," he said.

Part of what makes Sky attractive to U.S. companies wishing to expand in Europe is that it is an established brand across several countries in the region, where people are often used to paying monthly fees for pay TV.

Sky has 22.5 million customers in the U.K., Austria, Germany, Ireland and Italy who are attracted by its sport offerings like English Premier League soccer but also its film channels and TV shows like "Game of Thrones." Furthermore, Sky provides the telecom services — like internet connections — needed to view its content.

Comcast's move appears timed to capitalize on the trouble Fox has had in convincing British regulators to approve its bid to buy the 61 per cent of Sky it does not already own.

The British competition regulator has said in a preliminary finding that a Fox takeover would give the Murdoch family too much control of Britain's media. Last month it raised concerns about Murdoch's power because his family trust already controls newspapers such as the Times and the Sun, and the deal would increase its control of the influential Sky News channel.

Fox's bid for Sky is part of a larger corporate network of deals, in which Walt Disney Co. is trying to buy Fox for $52.4 billion. That was made on the assumption that Fox would buy out the rest of Sky, which has been described as the "crown jewel" in the Murdoch empire.

So a Comcast takeover of Sky could require Disney to revise its proposed takeover of Fox. It is likely, for example, to force Fox to offer a higher price for Sky, which would cause Disney to review its own bid for Fox.

"We would be shocked if Fox doesn't raise the bid on the Sky asset," said Daniel Ives, chief strategy officer at GBH Insights.

Comcast itself had been in talks to buy parts of Fox, so its bid for Sky could be a more direct way to acquire media assets in Europe, analysts say.

Shares in Sky surged 20 per cent to 13.26 pounds in London on the prospect of a bidding war. The company's management issued a statement advising shareholders to take no action as Comcast had not yet made a firm offer.

Disney did not respond to a request for comment.

Laith Khalaf, senior analyst at Hargreaves Lansdown, noted that Sky's value increased after it secured English Premiership football rights at a competitive price at an auction two weeks ago.

He said investors seem to anticipate further developments, including a counterbid from Fox.

"This isn't a done deal yet," he said. "Sky shares are now trading 2 per cent above the Comcast offer price, so the market clearly smells the scent of some more action before this saga draws to a close."


Mae Anderson in New York contributed to this report.

News from © The Associated Press, 2018
The Associated Press

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