NEW YORK - It’s been a year of media madness. Comcast’s $40 billion (R574 billion) lurch for Sky set a new standard for excess.
Walt Disney too paid an extravagant sum for parts of Rupert Murdoch’s empire, including a stake in the UK pay-TV group. Selling it would allow CEO Bob Iger to reduce the Magic Kingdom’s debt or add firepower to battle streaming rivals like Netflix.
In a rare closed-bid auction on Saturday, the US cable firm emerged victorious with its 17.28 pounds-a-share bid, beating Fox’s offer of 15.67.
To gain control, Comcast needs Sky investors to hand over at least 51 percent of their shares. But with such a lavish price – more than 100 percent above Sky’s undisturbed price before Fox’s 2016 attempt – the decision is a no brainer.
The moolah is far more valuable to the Mouse House than retaining a minority stake in Sky. Iger had to stretch his original bid for Fox’s assets by some 36 percent to $71 billion after Comcast entered the fray. Half of that is in cash, which will push Disney’s debt to more than three times EBITDA, executives said on a call in June.