US cable giant Comcast Corp offered £22 billion (Dh113bn) for pay-TV group Sky Plc on Wednesday, beating an agreed takeover bid from Rupert Murdoch's Fox by 16 per cent.
Comcast's bid throws down the gauntlet to Rupert Murdoch’s 21st Century Fox and Walt Disney as they vie for Britain’s largest pay-TV broadcaster.
Comcast is offering 12.50 pounds per Sky share (Dh64.09) in an all-cash deal, the Philadelphia-based company said in a statement Wednesday, confirming a proposed offer it made on February 27. The offer is at a 16 per cent premium to Fox's 10.75 pound-per-share bid for Sky.
European broadcaster Sky Plc withdrew its recommendation for the 21st Century Fox bid following the rival all-cash offer from Comcast, Bloomberg News reported.
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Comcast said it intends to give binding undertakings to maintain safeguards for the protection of Sky News’s editorial independence for ten years. It also proposed to protect media plurality in the UK by giving a binding post-offer undertaking not to acquire any majority interest in any British newspapers for five years.
It is now up to media billionaire Rupert Murdoch to decide whether to increase Fox’s bid to stave off Comcast’s challenge. Fox, which already has a 39 per cent stake in Sky, had planned to sell the broadcaster to Disney as part of their $52.4 billion merger announced in December.
“We have long believed Sky is an outstanding company and a great fit with Comcast,” Comcast CEO Brian Roberts said in the statement. “We very much hope that the independent committee of Sky directors will recommend our superior cash offer.”
Sky’s shares rose 3 per cent to 13.40 pounds at 11.03 a.m. in London, a 7 per cent premium to Comcast’s offer.
“This might elicit the bidding war,” said Alex DeGroote, a media analyst at Cenkos Securities. “We now have a formal proposition, instead of just a suggestion. Sky at these levels is a free bet on the upside.”
Comcast said acquiring Sky would boost its ability to invest in programming, innovation and would significantly expand its international footprint. About a quarter of Comcast’s sales would come from overseas after a successful acquisition of Sky, compared to 9 per cent currently, the company said.
Fox is still awaiting regulatory clearance in the UK for its Sky bid, with a final decision from Culture Secretary Matt Hancock expected by mid-June.
