US media conglomerate Comcast has surprisingly hijacked Rupert Murdoch’s Sky takeover bid, with a rival offer worth around £22 billion.
The American cable TV and broadband provider, which also owns the NBC-branded networks and Universal Pictures, is proposing a deal worth 16% more to Sky shareholders than Murdoch’s 21st Century Fox bid.
Fox already owns 39% of Sky, but is seeking to acquire the remainder in order to facilitate a blockbuster follow-up sale of 21st Century Fox assets to Walt Disney Inc.
Murdoch’s firm has been plotting the Sky takeover since late 2016, but has been held up by regulatory red tape.
Ofcom and the UK government continues to look into the bid over fears pertaining to news media ownership consolidation in the United Kingdom. Comcast, on the other hand, may not face those hurdles.
“Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBC Universal international operations, and we intend to maintain Sky’s UK headquarters,” Comcast chairman Brian Roberts said, via Recode.
“Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of company revenues.
“We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares. We are confident that we will be able to receive the necessary regulatory approvals.”
Bidding war imminent?
Fox partial ownership of Sky makes any new deal complicated, but if the Comcast offer was approved by 82% of Sky’s non-Fox shareholders, it would be enough to gain the requisite controlling interest in the firm.
Sky has 23 million Pay TV subscribers throughout Europe and a deal with Comcast would see the largest distributors in the US and Europe come under one banner.
Comcast’s bid caused Sky shares to jump by 18%, which suggests a bidding war to control the European Pay TV giant could be imminent.
It’s now thought Disney could make its own counter bid in order to buy Sky outright, which would put the proposed deal with Fox in jeopardy.
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