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Abu Dhabi, UAESaturday 20 October 2018

Sky takeover battle heats up with new bid from Comcast

Battle comes as Comcast is also embroiled in battle with Disney for Fox entertainment assets

The latest back-and-forth started on Wednesday morning when New York-listed Fox raised its offer to £14 for each outstanding share in Sky, up substantially on a previous tilt that was pitched at £10.75. EPA/FACUNDO ARRIZABALAGA
The latest back-and-forth started on Wednesday morning when New York-listed Fox raised its offer to £14 for each outstanding share in Sky, up substantially on a previous tilt that was pitched at £10.75. EPA/FACUNDO ARRIZABALAGA

Comcast increased its bid for pan-European TV group Sky on Wednesday, topping an offer from 21st Century Fox made hours earlier and escalating a takeover battle as media companies prepare themselves for the streaming era.

Comcast raised its bid for Sky to £26 billion ($34.3bn/Dh126bn) only hours after Rupert Murdoch's Fox boosted its offer for the 61 per cent of Sky it does not own.

Fox's latest bid values Sky at £24.5bn.

The battle for Sky comes as Comcast is also embroiled in a takeover battle with Disney for Fox entertainment assets that are being split off from Murdoch's empire. Some analysts have said Comcast could drop its bid for the Fox assets if it wins Sky.

Sky's jewel in the crown is its live coverage of English Premier League football, while the group also provides broadband internet and telephone services.

Media players such as Disney and Comcast have been looking to beef up their creative offerings to compete with Netflix and other streaming services that are eroding the value of conventional cable television assets.

The latest back-and-forth started on Wednesday morning when New York-listed Fox raised its offer to £14 for each outstanding share, up substantially on an offer of £10.75.

"As the founding shareholder of Sky, we have remained deeply committed to bringing these two organisations together to create a world-class business positioned to deliver the very best entertainment experiences well into the future," Fox said.

"The enhanced scale and capabilities of the combination will enrich Sky's ability to continue on its mission for years to come, especially at a time of dynamic change in our industry."

But only hours later Comcast rebutted the Fox move, releasing a bid after US markets closed of £14.75 per share, about five per cent above the Fox proposal.

Comcast said its sweetened offer has been accepted by Sky independent committee directors.

"Comcast has long admired Sky and believes it is an outstanding company and a great fit with Comcast," the company said after the US stock market closed.

"Today's announcement further underscores Comcast's belief and its commitment to owning Sky."

Fox's long-running pursuit for all of Sky has been plagued by UK government fears over media plurality and broadcasting standards – and the influence of Australian-born US citizen Murdoch.

Murdoch owns major British newspaper titles The Times and The Sun. Critics say obtaining full control also of the rolling television channel Sky News would give him too much influence in the news business.

To remedy this, Fox has proposed to sell Sky News to Disney.

Disney has gained the upper hand in the battle with Comcast for Fox's assets, winning US regulatory approval for the transaction and scheduling a July 27 shareholder vote on the proposed $71.3bn deal.

Still, Comcast has not walked away from trying to overtake the Fox-Disney tie-up.

Assets in the Fox deal include production companies responsible for The Simpsons and Modern Family, film production businesses and a major stake in the online platform Hulu.

Should Disney's bid for the Fox assets succeed, it will also obtain Fox's 39 per cent stake in Sky as part of the package.

Shares of Comcast rose 0.2 per cent in afterhours trading Wednesday to $33.82, while Fox slipped 0.1 per cent to $47.34. Disney was unchanged.