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Comcast Formalizes $31B Sky Bid

26 April 2018
Comcast Formalizes $31B Sky Bid

Fox has made multiple attempts to satisfy regulators, including by proposing to sell Sky News directly to Disney upon buying Sky.

US cable company Comcast Corp submitted a 22 billion pound ($31 billion) offer for pay-TV group Sky (SKYB.L) on Wednesday, challenging an already agreed but lower takeover bid from Rupert Murdoch's Fox (FOXA.O).

In late 2016, Fox offered to shell out $16 billion to buy the remainder of Sky it doesn't already own.

Following the formalisation of the Comcast bid, Sky's independent committee has withdrawn its recommendation of the 21 Century Fox offer which was made in December 2016.

Fox said in a statement it remained committed to its offer and was "considering its options".

Investors expecting a higher bid from Rupert Murdoch's Twenty-First Century Fox, with backing from Walt Disney boss Bob Iger, are betting on the triumph of sentiment over spreadsheet.

Its share price rose by over 4% following the announcement to £13.61 - significantly above the £12.50 per share offer by Comcast. According to a recent SEC filing, the family of 21Century Fox executives will make more than $206 million once the enormous Disney-Fox deal is completed and finalized.

Roberts said the combination would "fuel our ability to invest even further in innovation and drive more compelling financial returns". In addition to Comcast and as required by the Takeover Panel, Sky also intends to give the same post-offer undertakings conditional upon the Comcast Offer becoming wholly unconditional.

After Comcast's formal bid, Sky withdrew its recommendation that shareholders should accept Fox's offer.

"We think (Comcast) could reasonably take the offer up to 1300p, but they would be giving away value at anything above that", New Street Research analyst Jonathan Chaplin said.

Meanwhile, Comcast lost 96,000 Xfinity TV customers in the quarter, a sharp contrast to the 42,000 it added a year ago, the company said in its first-quarter earnings release.

Comcast said its bid came with a series of legally binding commitments on Sky ownership and United Kingdom investment. Sky will be our platform for growth across Europe.

The Fox offer had faced hurdles past year when the UK's Secretary of State for Culture, Media and Sport issued a European intervention notice, which asked United Kingdom media regulator Ofcom to report on two public interest considerations around the merger plans.