Comcast, the largest US cable company, is now offering 14.75 pounds a share for Sky
Comcast tops Murdoch offer by boosting Sky bid to $34bn
Comcast responded to 21st Century Fox's £24.5 billion bid less than 24 hours later, offering £26 billion as part of the escalating bidding war between the two media giants over the ownership of Sky news network.
According to people close to Comcast, CEO Brian Roberts immediately responded to 21st Century Fox's latest bid, allowing not even a day to pass without retaliating with a counter-offer the reported.
Mr Roberts commented that “we have long admired Sky which we believe is an outstanding company and a great fit with Comcast". Sky operates in a number of European countries including Austria, Germany, Ireland and Italy as well as the UK. It has 22.5 million customers reaching across the Europe and is an ideal platform to penetrate the European market.
Martin Gilbert, the deputy chairman of Sky, told the Financial Times the entertainment group’s independent committee had unanimously recommended the improved offer from Comcast.
Comcast attempted to block Mr Murdoch's attempt to buy the 61% of Sky his company did not already own in February while the Fox deal awaited government approval. The then Culture Secretary, Matt Hancock, said last month there would be no public interest concerns with a Comcast takeover of Sky.
If the UK Government Department of Culture gives regulatory approval for the bid, as is expected, then Fox has 28 days to notify shareholders that they need to vote on the deal. However, due to concerns about Murdoch holding the majority of shares in Sky, Fox will have to sell Sky News to win government approval because of concerns about media plurality.
Comcast is also approaching the deadline to offer a deal to Sky shareholders, who then have up to 60 days to reach a decision on the offer based on UK takeover rules.
Comcast's bidding competition with Fox over Sky comes as part of a larger all-or-nothing bidding war between Comcast and Disney to purchase FOX where, if Fox were to buy up Sky, whichever company subsequently buys it will dominate the US-UK media market - a giant development in the industry. This financial shakeup comes at a time when new digital players led by Netflix are wreaking havoc on the business models of long-established companies.
Disney and Comcast are each determined to win Fox news businesses, including movie studios, cable channels, National Geographic and a 30% stake in video website Hulu, as well as Indian network Star. Established media companies like Disney are looking for deals that would help them meet the challenge of fast-growing rivals including Netflix and Amazon.