Comcast's €25bn bid for Sky sees Murdoch's Fox dropped

Thursday, 26 Apr, 2018

The announcement, which accompanied Comcast's Q1 results, puts the U.S. cable and media group in a head-to-head battle with 21 Century Fox, whose existing bid for the company values it at £19 billion.

21st Century Fox Inc. responded Wednesday to Comcast Corp.'s announcement of a buyout bid for United Kingdom broadcaster Sky PLC, by saying it "remains committed" to its cash offer for Sky announced in December.

"We are delighted to be formalizing our offer for Sky today".

Sky withdrew its recommendation for the Fox deal following Comcast's offer, but stressed that both bids are "subject to pre-conditions and neither offer is now capable of being put to shareholders". The U.K.'s Competition and Markets Authority is now looking at the bid, which has already been scrutinized by media regulator Ofcom.

Separately, Comcast is weighing whether to play interloper on the pending Walt Disney Co. acquisition of 21st Century Fox's entertainment assets, people familiar with the situation say.

Fox responded to Comcast's bid by saying it was considering its options and a further announcement would be made in due course.

Sky's independent board members are withdrawing their recommendation of the 21st Century Fox bid. In February, Comcast floated a preliminary offer at the same price.

Comcast's formal entry to acquire Sky comes at a particularly tricky time for Fox, which is in the midst of selling off a large swathe of its operations to Disney.

Sky shares have risen 3.4% to £13.52 on the FTSE 100 following news of the bid.

Comcast chairman and CEO Brian Roberts said Sky withdrawing its recommendation was what he hoped to achieve by formalising its offer.

There was also a commitment not to secure any United Kingdom newspaper ownership for at least five years.

Comcast said it would pay 12.75 pounds for each Sky share, 16 percent more than Fox's offer.

Both offers are subject to regulatory approval. Sky has a strong business, excellent customer loyalty, and a valued brand.

Rupert Murdoch and one of his sons, Lachlan Murdoch, are Fox's two co-chairmen.

The bid by Comcast is a serious blow for Murdoch whose attempts at ownership of the remaining 61pc of Sky that 21CF doesn't claim has been a long-running battle.

The Sky committee noted its duty is to maximize value for shareholders.