Fox raises Sky offer to $32 billion in battle with Comcast
Fox offered £14 per share to value Sky at £24.5 billion ($32 billion), 12% more than Comcast’s rival £22 billion offer
London: Rupert Murdoch’s Inc. boosted its bid for Sky Plc, raising the stakes for Comcast Corp. to retaliate in a battle for control of Britain’s top pay-TV company.
Fox offered £14 per share to value Sky at £24.5 billion ($32 billion), 12% more than Comcast’s rival £22 billion offer. Sky shares fell as much as 2% as some investors had expected a higher counter fromFox , but are still trading above the latest Fox bid.
“They’re way behind the curve still,” said Crispin Odey, founder of Odey Asset Management LLP, which owns shares of Sky. “I think it will go at about £18.”
Now it’s up to Comcast to respond. Sky is a pawn in a wider contest between Comcast and Walt Disney Co. for the bulk of Murdoch’s media empire, as the US media giants try to take on powerful digital rivals like Netflix Inc. Murdoch has a deal to sell Fox’s entertainment assets including its Sky stake to Disney, though Comcast is weighing another bid for the Fox portfolio.
Sky shares traded at £14.90 as of 9:55 am in London.
The clock was ticking on Fox to make a higher bid for Sky, because Comcast faces a deadline of Friday to formally deliver its offer documents to shareholders of the London-based company, under UK takeover rules.
The expectation from some analysts had been that Fox would wait for final UK approval before coming back with a higher bid, but with Prime Minister Theresa May’s government committing to release a decision on Thursday, Fox pulled the trigger.
A spokesman for Comcast declined to comment on how the company will respond.
The UK government has already said it’s likely to approve Fox’s bid for Sky after Fox satisfied concerns over media plurality. Britain’s former Culture Secretary Matt Hancock, who was replaced on Monday night with Jeremy Wright in a cabinet shakeup, had said he was willing to let the takeover go ahead, provided Fox sold Sky’s 24-hour news channel to Disney.
Fox first went after the 61% of Sky it doesn’t already own in December 2016, offering £10.75 per share, but was held up over concerns that the tie-up would give Murdoch too much influence over Britain’s media.
Comcast tabled a proposal of £12.50 per share for Sky in February, and Sky’s stock has traded consistently above the Comcast offer as investors anticipated Fox or Disney would come back with more.
Sky’s independent directors accepted the latest Fox offer.
“We welcome this increased offer,” Martin Gilbert, deputy chairman of Sky, said in an emailed statement. “This offer reflects the strong position the business is in and is an attractive premium for shareholders.”
Sky gives Fox and Comcast a rare opportunity to diversify out of the US and reach more consumers directly. Sky has 23 million customers in five European countries and also boasts a market-leading platform, its Q box, and a suite of premium TV content to lure and retain subscribers, including rights to Premier League soccer. Of the assets he’s seeking to acquire from Fox, Disney chief executive officer Bob Iger called Sky “a real crown jewel.”
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