Comcast challenges Murdoch with rival bid for Sky
United States media giant Comcast on Wednesday offered
£22 billion (US$30.7 billion) for Sky PLC, topping a bid from Rupert Murdoch's 21st Century Fox and setting up a bidding war for the United Kingdom's biggest satellite television company.
Comcast said it would pay £12.75 for each Sky share, 16 per cent more than Fox's offer. Sky shares rose 3.9 per cent to £13.59 as investors bet Fox would sweeten its bid, and Sky withdrew its recommendation that shareholders accept the Fox offer.
Sky is based in London and has pay-TV operations across Europe, offering a platform for US companies like Comcast and Fox to expand abroad.
Fox, which already owns 39 per cent of Sky, offered to buy the rest of the shares last June, triggering concerns the deal would give Murdoch too much control over British media. Walt Disney Company, which is in the process of buying Fox, has signalled it would be interested in buying Sky to neutralise Murdoch's critics.
"The question now is whether Fox/Disney makes a knockout bid to discourage any further Comcast offer and what it thinks this level is without breaking the bank," analysts at Liberum Capital said in a note to clients.
Fox issued a statement saying it remains committed to its offer and is "currently considering its options".
Comcast CEO Brian Roberts said Sky's 23 million customers and leading positions in the UK, Italy and Germany would provide "significant opportunities for growth".
But Comcast isn't just wooing Sky shareholders. The company's offer was also pitched at the regulators and public officials who have raised concerns about the Fox bid.
The company laid out a strategy that showed it was interested in being a good corporate citizen in Britain, promising to use Sky as a platform for growth in Europe, maintaining Sky's UK headquarters and using the acquisition to "expand Comcast's international footprint".
"That is very important mood music to the takeover panel," said Alice Enders, the head of research at Enders Analysis.
The company also said it would maintain the funding and independence of Sky's news operation for at least 10 years and pledged that it wouldn't buy any British newspapers for at least five years.
The regulator is conducting an investigation into whether Fox's offer would give Murdoch and his family who already own several other media titles in the UK too much control over the country's news media. Fox has proposed remedies to address those concerns, and the government will decide by the end of June whether they are enough.