Comcast challenges Murdoch’s Sky bid with $31bn offer

Murdoch’s bid to buy rest of pay TV firm has been held up by regulators

Comcast said it was offering £12.50 (€14.22) per Sky share, significantly more than the £10.75 (€12.23) per share agreed by Fox. Photograph: Brendan McDermid/Reuters

Comcast said it was offering £12.50 (€14.22) per Sky share, significantly more than the £10.75 (€12.23) per share agreed by Fox. Photograph: Brendan McDermid/Reuters

 

Comcast, the biggest cable operator in the United States, offered to pay $31 billion (€25.3 billion) to buy Sky, the European pay-TV group that Rupert Murdoch’s Fox has already agreed to buy.

Comcast, which owns NBC and Universal Pictures, said it was offering £12.50 (€14.22) per share, significantly higher than the £10.75 (€12.23) per share agreed by Fox. The proposed offer pits Comcast against Murdoch, the 86-year-old media tycoon who helped to launch Sky in Britain, and also against Walt Disney, which has agreed to buy a string of assets from Fox once the deal is done, including Sky.

Sky is the largest pay-TV operator in Ireland, with estimated television customers of more than 600,000.

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

“We would like to own the whole of Sky and we will be looking to acquire over 50 per cent of the Sky shares,” Comcast chief executive Brian Roberts said in a statement.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Mr Roberts said on a conference call.

“Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth.”

Independent shareholders

Sky’s chairman is Murdoch’s son James, who is the chief executive of 21st Century Fox, so Comcast will have to gain the support of the independent shareholders for its better offer if it does not make a hostile bid. Fox agreed to buy the 61 per cent of Sky it did not already own in December 2016 but the takeover has been repeatedly held up by regulatory concerns that Mr Murdoch controls too much media in Britain.

Some Sky shareholders have also started to complain that the offer was too low. In December, hedge fund manager Crispin Odey argued that Sky was being sold too cheaply.

Britain’s competition regulator said in January that Murdoch’s planned takeover should be blocked unless a way was found to prevent him from influencing the network’s news operation, Sky News.

The Competition and Markets Authority said the deal would give Mr Murdoch, who has been trying to buy Sky for eight years, too much influence and so would not be in the public interest.

Mr Murdoch’s news outlets are watched, read or heard by nearly a third of Britons and have a combined share of public news consumption that is significantly greater than all other news providers, except the BBC and commercial TV news provider ITN.

Last week, Fox made further concessions, with a promise to maintain and fund a fully independent Sky-branded news service for 10 years.

Comcast said it had only a minimal presence in the British media market and did not see any plurality concerns over its proposal. Comcast said it recognised that Sky News was an “invaluable part of the UK news landscape” and it intended to maintain Sky News’s existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards.

“Our strong market positions are complementary with Sky’s leadership in Europe, enhancing our pre-eminent position in the US,” Comcast’s Roberts said. – Reuters