BY Richard Summerfield
The battle for UK pay-TV broadcaster Sky has intensified as both 21st Century Fox and Comcast have increased their offers for the company to £24.5bn and £26bn respectively.
Fox’s sweetened offer, which was submitted on Wednesday, would see it pay £14 per share. Fox’s original bid of £10.75 per share for the 61 percent of Sky it does not own was lodged in December 2016.
Comcast first offered £12.50 per share, valuing the company at £22bn. Comcast's latest offer of £14.75 per share prompted Sky’s independent committee recommending shareholders to reject Fox's. Comcast also announced that its increased offer has been recommended by the Sky Independent Committee of Directors.
“We are pleased to be announcing a recommended increased offer for Sky today,” said Brian Roberts, chief executive of Comcast. “We have long admired Sky, which we believe is an outstanding company and a great fit with Comcast. We will be posting our offer document to Sky shareholders shortly.”
Comcast’s offer represents an “attractive premium to the current alternative offer", said Martin Gilbert, deputy chairman of Sky. “We have long recognised the unique position that Sky occupies, and unanimously recommend this offer by Comcast,” he added.
The UK government had been expected to approve Fox’s latest bid for Sky after the company satisfied ongoing concerns over media plurality. Britain’s former Culture Secretary Matt Hancock, who was replaced this week following a cabinet shakeup, was willing to let the takeover go ahead, provided Fox sold Sky’s 24-hour news channel to Disney.
The battle for Sky is just part of the wider ongoing fight for control in the media and telecoms sector, where consolidation has become a key consideration. Fox itself is subject to an ongoing battle between Disney and Comcast. Fox’s assets, including its existing stake in Sky, as well as its movie studios, cable channels, National Geographic and a 30 percent stake in streaming service Hulu are all subject to ongoing fight for Fox.
Disney has offered $71.3bn in cash and shares for the company, minus Fox News, Fox Sports and Fox Television Stations, which would be spun off into a new company called ‘New Fox’. Sky has 23 million customers in five European countries and also boasts a market-leading platform. The company has a slew of original content and licence agreements, notably with the English Premier League.
The media and telecoms industry is in a state of flux as traditional players attempt to keep pace with streaming giants such as Netflix and Amazon and readjust to the new media landscape.
Sky’s shares were up 3 percent on Thursday in anticipation of additional bidding for the company.