Sky and Fox shares rise as rivals eye Rupert Murdoch’s empire

Twenty-First Century Fox shares jumped in US trading and Sky shares rose in London after sources said both Comcast and Verizon Communications were also interested in buying parts of its studio and TV operations.

A week after reports of interest from Walt Disney in buying out much of Rupert Murdoch’s US film and television empire, the sources hinted at the prospect of a battle between other media suitors for the assets.

Buyers have expressed interest in Fox’s production studios, cable networks FX and National Geographic, and international assets such as the Star network in India and Sky, sources told Reuters. Fox shares have gained about 9% in value in the last six months.

Sky shares shot up by over 3% at one stage to the top of the FTSE. “Comcast’s interest in the 39% stake in Sky seems plausible,” said Liberum analysts. “Its NBC Universal has publicly stated its interest in expanding its non-US assets for a number of years and the UK is a key market for many of the US media groups,” the analysts said. The US groups’ interest demonstrates Fox’s stake in Sky is still seen as a valuable asset, Liberum added.

“Either Disney or Comcast would be a good fit, but its always about price and neither has to be a strategic buyer, only opportunistic,” said JBL Advisors analyst Jeffrey Logsdon. Shares of other media companies which could be dragged into a round of consolidation of US film and TV production and distribution were largely unchanged. Comcast, the largest cable provider in the US, has steadily boosted its content ownership over the years and buying Fox’s assets would give it an international distribution footprint and strengthen its position against Disney.

Traditional media companies have been struggling with subscriber declines as streaming service Netflix has gained traction with younger audiences that shun cable and satellite offerings.

Netflix and Verizon shares were marginally higher at one stage. Disney and Comcast shares both inched down. Fox and Disney are co-owners of Hulu, a streaming service that offers on-demand and live TV packages. Hulu is also partially owned by Comcast and Time Warner. Although acquisition of a movie studio and cable channels would be a departure for wireless carrier Verizon, its interest in Fox assets was likely piqued by rival AT&T’s bid for HBO and CNN owner Time Warner, which is awaiting regulatory approval.

“(I am) sceptical of a Verizon deal, creative businesses are very tough to manage for an outsider,” Mr Logsdon said.

Fox’s other assets include Fox television network, Fox News Channel and Fox Entertainment Group.


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