UK Clears Battleground For Sky-Comcast Battle
Now for the first round in the Murdoch family’s big media battle of 2018 - its reach for control of its 39% owned UK-based satellite Pay TV business, Sky, which will see it up against the US group Comcast, which also wants to crash the $US66 billion Fox deal with Disney.
This is after the two offers for Sky from 21st Century Fox and Comcast were cleared by the UK government to proceed this week. But while Comcast’s offer can go ahead unhindered, the Murdoch offer has the provison that it has to sell Sky News - which is why Disney is involved on the other side of the Atlantic as well -as a safety net for Fox.
First up though, if the Murdoch family and its partners, Disney, want to buy all of Sky, they will have to offer a lot more money - $US4 billion or more - to top the higher all cash $US31 billion offer from Comcast.
While some UK media analysts wonder if another party might emerge with an offer from Sky News - Disney is the preferred option for the Murdochs as a Sky News buyer of last resort (as Disney will get control of all of Sky if its assets purchase deal with Fox in the US goes ahead and isn’t disrupted by an all cash offer from Comcast).
The decision by the UK government to clear both bids was announced by Culture Minister Matt Hancock in a speech to the UK Parliament (https://www.gov.uk/government/speeches/update-media-mergers) who said there were no broadcasting standards or public interest grounds on which to intervene while on the Fox offer he said a commitment by Fox to sell Sky News to Walt Disney was sufficient to alleviate concerns about UK media plurality. The Murdochs’ other company.
News Corp is the dominant player in the UK newspaper industry controlling the best selling Sun, Sun on Sunday, Times, Sunday Times and their websites.
Talks will now begin between officials at the Department for Culture, Media and Sport, and Fox, Sky and Disney “to finalise the details with a view to agreeing an acceptable form of the remedy”, Mr Hancock told the UK parliament.
But not before Comcast’s higher offer forces another move from Fox. At the moment Fox’s bid of £10.75 a share values Sky at about £18.5 billion, short of the £12.50 a share offer from Comcast, or around £22 billion. Without a higher price from Fox, Comcast’s bid will retain the approval of Sky’s independent directors. if that happens, Disney or Fox could be left with 39% and nowhere to go except to sell to Comcast.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.