Comcast launches rival bid for Sky, beating Fox offer

Tuesday 27 February 2018 | 08:39 CET | News

US-based Comcast has announced that it's considering a takeover bid worth GBP 22.1 billion for European pay-TV group Sky, beating the earlier offer from Sky's largest shareholder, 21st Century Fox. Comcast would offer GBP 12.50 per share cash, a 16 percent premium to Fox's bid of GBP 10.75. 

The news sees Comcast, the largest cable operator in the US and owner of the NBCUniversal broadcast network and film studio, make its first major move abroad. The company is hoping its offer as a newcomer may gain more favour with UK regulators, who are concerned about Fox's commitment to broadcast standards and the impact on media plurality from a Sky takeover. Fox launched its bid more than a year ago, but is still waiting for regulatory clearance. 

The Comcast bid is conditional on just 50 percent plus one share being tendered, meaning Fox could still hold on to its 39 percent stake in the company. Comcast could acquire the rest of Sky later if Fox's takeover by Disney is completed or agree to joint own Sky with Disney. 

Comcast also pledged to continue investment in the creative industries in the UK and support "high broadcasting standards and news impartiality". The Sky brand and HQ as well as the Sky News channel would be maintained, and the company would increase its investment in UK TV and film production. 

Comcast said the merger would allow it to leverage its content production and technology on a global scale, improving its competitive position. NBCUniversal already has over 1,000 employees in the UK and would use Sky to expand its position in Europe further. Adding Sky would increase Comcast's share of international revenues from 9 to 25 percent, as well as increase free cash flow immediately after completion of the takeover, the company said. 

Sky issued a short statement in response to Comcast's announcement, saying as the offer was not yet firm, no action by shareholders was needed. The company added that its independent directors, representing the interests of shareholders other than 21st Century Fox, were "mindful of their fiduciary duties" and obligations under the UK takeovers code. 

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