Comcast has moved swiftly to counter the enhanced takeover offer submitted by 21st Century Fox for pan-European pay-television broadcaster Sky by entering a new bid to exceed that of its rival US media company.
Comcast’s move on Wednesday evening came just hours after Fox announced its improved offer and intensifies the race for control of Sky. Comcast’s new offer for the entire issued and to be issued share capital of Sky is worth £14.75 (€17/$19.5) per share, valuing the broadcaster at approximately £25.9bn.
Fox’s new offer of £14 per share values Sky at £24.5bn and came after Comcast in April announced a firm superior cash proposal to acquire Sky, which is operated by 21st Century Fox. Comcast’s announcement of a superior cash proposal of £12.50 per share represented a 16 per cent increase in value over the existing 21st Century Fox offer, which valued Sky at around £19bn. Comcast’s initial cash proposal implied an equity value of £22bn for Sky.
Comcast’s offer is for all of Sky, while Fox, which already owns 39 per cent of the broadcaster, is seeking to secure full control of the company by acquiring the 61 per cent stake it does not already hold.
Comcast yesterday said that its increased superior cash offer has been recommended by the Sky Independent Committee of Directors. Comcast has already received relevant regulatory approvals in the EU, Austria, Germany, Italy, and Jersey. It added that it expects to complete the acquisition before the end of October.
Brian Roberts, chairman and chief executive of Comcast said: “We have long admired Sky which we believe is an outstanding company and a great fit with Comcast. Today’s announcement further underscores this belief and our commitment to owning Sky.”
Commenting on the increased offer, Martin Gilbert, deputy chairman of Sky, said: “The Independent Committee welcomes this increased offer which presents an attractive premium for Sky shareholders to the current alternative offer for the company. We have long recognised the unique position that Sky occupies in the European direct-to-consumer landscape and unanimously recommend this offer by Comcast.”
Comcast is also engaged in an equally significant takeover process in the US, involving Fox. On June 20, US media company Disney tabled an improved $70.4bn (€61bn) takeover offer for a significant share of 21st Century Fox’s business assets.
The amended transaction agreement marked a considerable increase on the $52.4bn deal sealed with Fox in December and came after Comcast earlier submitted a counter-bid of $65bn.
In other news, the UK’s newly-appointed Secretary of State, Jeremy Wright, has today (Thursday) confirmed that Sky is now free to select the bid put forward by Fox, should it choose to do so.
In a process started by his predecessor Matt Hancock, the Department for Digital, Culture, Media and Sport had been reviewing the proposed Fox-Sky deal while awaiting a decision on the proposal by the Competitive Markets Authority. A follow-up consultation on the CMA's decision closed last week and the DCMS issued a statement on the matter today.
Wright said: “The publication of the undertakings marks the final stage of the public interest consideration of this case. It is right that Ofcom, the CMA and my Department have taken such care in ensuring the bid is properly and effectively scrutinised. It is now a matter for the Sky shareholders to decide whether to accept 21CF’s bid.”
Hancock approved Fox’s bid on the condition that the company offloads the Sky News operation to another organisation, which would guarantee its independence and support it financially for a minimum of 10 years.
Regulatory scrutiny has held up Fox’s bid for the 61 per cent of Sky that it does not already own for 18 months.