INTERNATIONAL - Comcast, the biggest cable operator in the US, yesterday offered to pay $31billion (R358.28bn) to buy Sky, challenging Rupert Murdoch’s Fox and Bob Iger’s Walt Disney for the European pay-TV jewel.
Comcast, a $184bn media giant which owns NBC and Universal Pictures, said it was offering £12.50 (R202.17) per share, significantly higher than the £10.75 per share agreed by Fox. Shares in Sky soared 18percent.
Present in 23million homes across Europe and known for its technological innovation, Britain’s Sky has already agreed to be sold to Murdoch’s 21st Century Fox, but the takeover has been delayed by concerns over the media tycoon’s influence in Britain.
That has complicated a separate $52bn deal by Disney to buy Fox assets, including Sky.
“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast chief executive Brian L Roberts, 58, said. “We think Sky is an outstanding company.”
The latest round of major deals indicates the pressures being felt by traditional cable television networks which have been losing customers to streaming services like Netflix and Amazon.com.
Media rivalries
Shares in Sky rose to £13.08 as investors hoped the ensuing bid battle would push both sides to offer a higher price. “The initial share price reaction suggests that this story has further to run, with Sky’s price leaping above the level of the already increased Comcast offer,” said Richard Hunter, Head of Markets at Interactive Investor.
The proposed offer pits Comcast’s Roberts against Murdoch, the 86-year-old tycoon who helped to launch Sky in Britain, and who has been edging towards finally getting his hands on Sky after he first bid for the company eight years ago.
It also pits Roberts against Disney’s Iger, a long-time rival after Comcast tried to buy Disney for $54bn in 2004.
Comcast said it had not yet engaged with Sky over the proposal and nearly 90minutes after the statement came out, Sky was yet to respond.
“We would like to own the whole of Sky and we will be looking to acquire more than 50percent of the Sky shares,” Comcast's Roberts said.
“Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth,” he said.
Sky’s chairperson 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 61percent of Sky it did not already own in December 2016, but the takeover has been repeatedly held up by regulatory concerns that Murdoch controls too much media in Britain.