The Times
Comcast, the American cable television giant, has formalised its £12.50-a-share bid for Sky, setting the stage for a battle with Rupert Murdoch’s 21st Century Fox.
The bid represents a premium of about 16 per cent on Fox’s existing offer of £10.75 a share and values the pay-TV broadcaster at £22 billion. Sky shares rose 4 per cent to £13.61 on expectations of a counter offer.
Comcast announced its intention to launch a bid for Sky in February, gatecrashing 21st Century Fox’s planned £18.5 billion takeover. It confirmed the terms of its superior cash offer this morning.
[post_ads]The cable company also announced its intention to enter into legally binding commitments regarding Sky and investment in the UK, including for Sky News, the loss-making news channel. Current funding levels of Sky News will be maintained for ten years, with a Sky news board established to ensure the channel’s independence.
Comcast has also pledged to not to purchase any newspapers in the UK for five years to assuage any concerns about media plurality.
In a statement, 21st Century Fox said that it remained committed to its recommended cash offer and was currently considering its options. However, Sky said that it had withdrawn its recommendation as a result of the higher offer and was terminating a co-operation agreement with Fox.
Fox’s bid for the 61 per cent of Sky it does not already own has been dogged by regulatory concerns relating to plurality. It has proposed a series of enhanced remedies to address issues raised by the Competition and Markets Authority, which fears that the Fox-Sky deal would give the Murdoch family too much influence over public opinion. Rupert Murdoch is co-chairman of Fox and chairman of News Corporation, owner of The Times, The Sun and The Sunday Times.
Under the Fox proposals, Sky News would be spun off as a separate entity or sold directly to Disney, which is seeking to purchase all of Fox’s entertainment assets in a separate transaction.
Analysts expect the Murdochs to come back with a higher offer for Sky.
Brian Roberts, chairman and chief executive of Comcast, said: “We are delighted to be formalising our offer for Sky today. We have long believed Sky is an outstanding company and a great fit with Comcast.
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“Sky is a highly complementary business and will expand Comcast’s international footprint in the UK and continental Europe. Sky will be our platform for growth across Europe. The combined customer base of approximately 52 million will allow us to invest more in original and acquired programming and innovation as we strive to deliver a truly differentiated customer experience.”
Mr Roberts said that Comcast was committed to being “responsible and trusted” owners of Sky. “We understand and appreciate the value of news and are committed to protecting the important role that Sky News plays in providing a high-quality impartial news service.”
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