Comcast takes on Disney and Murdoch with Sky bid

By Kate Holton

US cable giant, Comcast, offered to buy Sky for £22.2bn (€25.3bn), in an unsolicited approach, taking on Rupert Murdoch’s Fox and Bob Iger’s Walt Disney in the battle for Europe’s biggest pay-TV group.

The world’s biggest entertainment company, which owns NBC and Universal Pictures, said it proposed to offer £12.50 per share, significantly higher than the £10.75 Fox had agreed to pay for the British company.

The offer pits Comcast’s Brian L Roberts against Murdoch, the 86-year-old tycoon, who helped to launch Sky and pioneer pay-TV in Britain.

Mr Iger is also a long-time rival, after Comcast tried and failed to buy Disney for $54bn (€44bn) in 2004.

Disney had agreed to buy Sky from Fox at a later date, along with other assets, in a separate deal worth $52bn.

Media owners have been forced to embark on a wave of dealmaking and to hunt for growth, after the success of online groups, Netflix and Amazon, prompted customers to start ditching their subscriptions.

Comcast bid $60n last year to clinch a deal with Murdoch’s Fox, before losing out to Disney.

Shares in Sky soared 21%, indicating that investors expect a bidding war for a company that provides sports programming, films, and broadband to 23m homes across Britain, Ireland, Germany, Italy, and Austria.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content. We think Sky is an outstanding company,” the Comcast chief executive said.

Sky urged its investors to take no action, since the approach did not represent a firm offer.

In December, 2016, Mr Murdoch’s Fox agreed to buy the 61% of Sky it did not already own, but the takeover has been repeatedly held up by regulators, over concerns the media tycoon wields too much influence in Britain.

The shares had been trading above the asking price, since Sky, this month, agreed to pay less-than-expected for Premier League soccer rights, boosting its future earnings and prompting investors to demand a higher offer.

The prospect of a fight for a higher price also attracted the attention of US hedge fund and activist investor, Elliott, which has built up a 2.5% stake in Sky in recent weeks.

Formed in 1990, Sky has built its business by offering leading content and technology. It snapped up Mr Murdoch’s pay-TV groups across Europe, in 2014, to offer a distribution platform that is now proving attractive to the big US content-owners.

Comcast said it had not yet engaged with Sky over the proposal.

Bloomberg