Sky posts strong figures ahead of expected bidding war

Pay TV group sees turnover up 5% as it adds 38,000 new customers

Sky reported another set of strong quarterly results, a boon to shareholders who are anticipating a bidding war between 21st Century Fox and Comcast for the pay-TV broadcaster. Photograph: David Jones/PA Wire

Sky reported another set of strong quarterly results, a boon to shareholders who are anticipating a bidding war between 21st Century Fox and Comcast for the pay-TV broadcaster. Photograph: David Jones/PA Wire

 

Sky Plc reported another set of strong quarterly results, a boon to shareholders who are anticipating a bidding war between 21st Century Fox and Comcast for the pay-TV broadcaster.

Sky added 38,000 new customers in the three months to March 31st and nine-month like-for-like revenue rose 5 per cent to £10.1 billion (€11.6 billion), the company said in a statement Thursday. Core earnings were up 10 per cent to £1.7 billion.

“No matter what happens to the company’s ownership over the next few months, we all feel that Sky’s a business in a strong position,” chief executive Jeremy Darroch said on a call with reporters. “We’re well placed for the future.”

Mr Darroch also said he had no interest in running WPP, the world’s biggest ad group which is searching for a new chief executive after the abrupt departure of Martin Sorrell on Saturday. He had been suggested as a possible candidate by industry insiders.

“I have no interest in running WPP, thank you very much,” he said. “Good luck to them in their change. I wish them well, but I am very happy just focusing on Sky.”

Rupert Murdoch’s Fox is weeks away from hearing the fate of its £11.7-billion takeover of Sky, with a UK government decision due by June 13th. Comcast, which has made a rival proposal for Sky at a 16 per cent premium to Fox’s bid, is expected to formalise its offer shortly, setting up a bidding contest.

The expectation of a tussle between Fox, which already owns 39.1 per cent of Sky, and Comcast has sent Sky’s stock above Comcast’s £12.50 per share offer announced in February. Fox bid £10.75 per Sky share in December 2016.

Mr Darroch said Sky had been cooperating with Comcast to help its regulatory process, but declined to comment further until Comcast makes a firm bid.

Fox ultimately plans to offload Sky to Walt Disney Co. as part of a $52.4 billion deal for the bulk of Fox’s media and entertainment assets announced in December.

The prospects of the Fox-Sky deal currently hang on whether UK competition regulators think the tie-up would give Mr Murdoch – whose News Corp owns the Times, Sunday Times and Sun newspapers – too much influence over British media. They will give their recommendation to culture secretary Matt Hancock by May 1st.

Fox has offered a series of concessions to get the Sky deal through. They include giving Sky News an independent editorial board insulated from Murdoch’s influence, or selling the channel to Disney.

Should the Fox-Sky deal be blocked and Disney completes its Fox acquisition, Disney would be forced to make its own £10.75 a share bid for Sky, UK regulators said last week. – Bloomberg