US pay TV and movie giant, Comcast has ended Rupert Murdoch family’s involvement with European broadcasting by outbidding 21st Century Fox and its ally, Disney for the UK-based euro satellite TV group Sky in a deal valued at more than $A50 billion (or around $US39 billion).
A regulator-run three round auction in London on Saturday saw Comcast’s 17.28 pounds a share for control of Sky top the final 15.67 pounds a share offer by Fox in the final rounds of bids.
Comcast’s final offer was significantly higher than its last pre-auction offer of 14.75 pounds and compares with Sky’s closing share price of 15.85 pounds on Friday. The Murdochs had originally by 10.50 pounds for Sky in December 2016 and lifted that to 14 pounds after Comcast has gatecrashed the deal and overbid the Murdoch company twice.
While this bidding war started in late 2016, Rupert Murdoch’s attempts to snaffle Sky first started in June 2010 with a 6.75 pounds offer that was increased to 7 pounds (but the Sky independent directors wanted 8 pounds a share, a price the Murdochs refused to accept). But the News of the World phone-hacking scandal saw the Murdochs forced to abandon the bid in July 2011 and they then bided their time until late 2016.
But that offer was stymied by investigations and complaints into the level of influence the Murdochs had in the UK media and would have if their bid for Sky succeeded.
UK regulators ring fenced Sky News and forced Fox, Disney (which had struck a deal to buy most of the media assets from Fox in cable, TV and TV and film production, including Sky) and Comcast to guarantee the independence and funding for Sky News for 15 years.
Owning Sky will make Comcast the world’s largest pay-TV operator with around 52 million customers. With operations in Germany, Italy, Austria, and Ireland, as well as the UK, Sky has 23 million subscribers (including a growing number also buying mobile and broadband services as well as their satellite subscriptions) and will give Comcast a powerful base with which to battle streaming services like Netflix and Amazon.
Comcast, which requires 50% plus one share of Sky’s equity to win control, said it was also seeking to buy Sky shares in the stock market. A spokesman for Fox, which has a 39.1% holding in Sky, declined to comment.
If there is a surge in shares coming onto the UK market tonight, then Comcast stands a good chance of winning. The Fox holding though holds the key.
Fox can decline to accept the Comcast offer and remain a shareholder and force unwanted costs on Comcast, and demand Sky board positions.
If they accept Comcast’s offer, Fox will get around $A21 billion (or around 12 billion pounds). The sale of Sky should reduce Disney’s $US71.3 billion price for the Fox assets (Star, the cable networks, Fox film studios, and production businesses).
