Business
2018.09.23 08:49 GMT+8

Comcast outbids Fox with $40 billion winning offer for Sky

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Comcast beat Rupert Murdoch's Twenty-First Century Fox in the battle for Sky on Saturday after offering 30.6 billion pounds (40 billion US dollars) in an auction to decide the fate of the pay-television group.

The US cable giant bid 17.28 pounds a share for control of London-listed Sky, bettering a 15.67 pounds-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.

Brian Roberts, chairman and chief executive officer of Comcast. /VCG Photo

Chairman and chief executive 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.

Disney has agreed to a separate deal of 71 billion US dollars to buy most of Fox's film and TV assets, including its existing 39-percent 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 pounds and compares with Sky's closing price of 15.85 pounds 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 sources said.

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 recommending it as it represents materially superior value," said Martin Gilbert, chairman of Sky's independent committee. "We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast offer."

Fox noted the recommendation, saying it was considering options for its 39-percent stake and would make another announcement in due course.

"Sky is a remarkable story, and we are proud to have played such a significant role in building the incredible value reflected today in Comcast's offer," Fox said.

Fox's holding, which Comcast's offer is valued at more than 15 billion US dollars, stems from Murdoch's role in the creation of the company nearly three decades ago.

His younger son James was pivotal in building Sky into Europe's leading pay-TV operator as its former chief executive and current chairman.

Source(s): Reuters
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