Comcast offers $40.5 billion for Sky, topping 21st Century Fox offer

Angelica Greene
April 26, 2018

NBCUniversal parent company Comcast has launched a £22 billion (approximately US$31 billion) takeover bid for European satcaster Sky that pits the USA cable company against its previous suitor, Rupert Murdoch's 21st Century Fox.

"We have long believed Sky is an outstanding company and a great fit with Comcast", Comcast CEO Brian Roberts said in a statement.

Comcast said its cash offer is to buy the remaining 61 per cent of Sky it does not already own.

Fox already owns a 39 percent stake in Sky and the media mogul had hoped to take complete control of the broadcaster that has 23 million retail customers in the UK. Sky has withdrawn its recommendation to shareholders for that bid to proceed following the Comcast offer.

Comcast formalized its offer through what is known as a Rule 2.7 announcement in which it said it was committed to preserving Sky's editorial independence and would not acquire a majority interest in any United Kingdom newspaper for five years "to ensure media plurality is sustained". The U.K.'s Competition and Markets Authority is now looking at the bid, which has already been scrutinized by media regulator Ofcom.

Analysts at Liberum said a counterbid from Fox/Disney was very likely.

Comcast said it lost 96,000 video subscribers in the March quarter vs. 42,000 a year earlier.

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Comcast's potential disruption of Murdoch's plans comes almost seven years after the media mogul withdrew a previous bid for full control of Sky, an offer that was derailed by the phone-hacking scandal that resulted in the closure of his newspaper The News of the World.

The American based cable operator, Comcast has formally put a bid of £22 billion forward to acquire Sky. Fox has made multiple attempts to satisfy regulators, including by proposing to sell Sky News directly to Disney upon buying Sky. Nevertheless, investors who pushed Sky shares up 4 percent to 13.57 pounds on Wednesday are wagering on Disney and Fox disregarding financial sense.

Roberts added, "Comcast intends to use Sky as a platform for growth in Europe".

A deal for Sky would expand Comcast's worldwide footprint to "more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape", the cable giant previously said. The deal would lead to cost savings and revenue benefits to the tune of about $500 million annually, Comcast said.

As more people switch to streaming services, the company lost 96,000 cable TV customers.

The numbers underscore a strategy shift in the USA away from cable-TV viewers and toward the sale of broadband service.

Other reports by GizPress

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