Comcast outbids Fox with $40 billion offer for Sky in auction
* Comcast bids 17.28 pounds a share in dramatic rapid
* Murdoch's Fox raised its final bid to 15.67 pounds
* Comcast likely to win prize, thwarting Fox-backer Disney
(Adds Sky's board recommendation, reaction)
By Ben Martin and Paul Sandle
LONDON, Sept 22 (Reuters) - Comcast beat Rupert
Murdoch's Twenty-First Century Fox in the battle for
Sky on Saturday after offering 30.6 billion pounds ($40
billion) in a dramatic auction to decide the fate of the
The U.S. cable giant bid 17.28 pounds a share for control of
London-listed Sky, bettering a 15.67 pounds-a-share offer by
Fox, Britain's Takeover Panel said.
Buying Sky will make Philadephia-based Comcast, which owns
the NBC network and Universal Pictures, the world's largest
pay-TV operator with around 52 million customers.
Chairman and chief executive Brian Roberts has had his eye
on Sky as a way to help counter declines in subscribers for
traditional cable TV in its core U.S. market as viewers switch
to video-on-demand services like Netflix and Amazon
"This is a great day for Comcast," he said. "This
acquisition will allow us to quickly, efficiently and
meaningfully increase our customer base and expand
Comcast's knock-out offer thwarted Murdoch's long-held
ambition to win control of Sky, and is also a setback for U.S.
entertainment giant Walt Disney which would have likely
been its ultimate owner.
Disney agreed a separate $71 billion deal to buy most of
Fox's film and TV assets, including its existing 39 percent
stake in Sky, in June and would have taken full ownership after
a successful Fox takeover.
Comcast's final offer was significantly higher than its bid
going into the auction of 14.75 pounds, and compares with Sky's
closing price of 15.85 pounds on Friday.
Comcast believed it needed to deliver a knock-out blow given
that Fox's existing stake in Sky gave it a chance of victory if
it was a close second to Comcast, two sources said.
Comcast's final offer - more than double Sky's share price
before Fox made its approach in December 2016 - quickly won the
backing of Sky's independent directors on Saturday.
"We are recommending it as it represents materially superior
value," said Martin Gilbert, chairman of Sky's independent
committee. "We are focused on drawing this process to a
successful and swift close and therefore urge shareholders to
accept the recommended Comcast offer."
Fox will now concede defeat, a source told Reuters.
It is reviewing options for its stake, a holding that stems
from Murdoch's role in the creation of the company nearly three
decades ago, the source said.
Fox declined to comment.
Comcast, which requires 50 percent plus one share of Sky's
equity to win control, said it was also seeking to buy Sky
shares in the market.
One hedge fund manager who holds Sky shares said nobody
could complain about the Comcast price.
"The question now is if Fox actually sells out and if not
can Comcast get to 50 percent," he said.
Another hedge-fund manager said it was a "huge" price, and
shareholders would accept it.
Sources familiar with the matter said Fox, Disney and
Comcast had not been in discussions about the 39 percent stake.
The quick-fire auction marked a dramatic climax to a
protracted transatlantic bidding battle waged since February,
when Comcast gate-crashed Fox's takeover of Sky.
It is a blow to 87-year-old Murdoch and the U.S. media and
entertainment group that he controls, which had been trying to
take full ownership of Sky since December 2016.
Murdoch's son James, currently chairman of Sky, was
instrumental in building the company into the leading European
pay TV group, with operations in Britain, Ireland, Germany,
Austria and Italy, and more than 23 million customers attracted
to its top-flight sport and entertainment content.
Sky's chief executive Jeremy Darroch said it was the
beginning of a new chapter. "Sky has never stood still, and with
Comcast our momentum will only increase," he said.
($1 = 0.7648 pounds)
(Additional reporting by Maiya Keiden and Liana Baker, editing
by Alistair Smout and Hugh Lawson)
First Published: 2018-09-22 20:11:59
Updated 2018-09-22 23:12:23
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