US media company 21st Century Fox has today (Wednesday) upped its offer for control of pan-European pay-television broadcaster Sky, eclipsing the proposal made by rival Comcast.
Fox’s new offer values Sky at £24.5bn (€27.8bn/$32.5bn) and comes 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 superior 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.
Fox and Sky today announced that they have reached agreement on an increased recommended pre-conditional cash offer for the fully diluted share capital of Sky which Fox and its affiliates do not already own at a price of £14 per share.
The acquisition remains subject to one outstanding precondition, being the approval of the UK Secretary of State. The Secretary of State yesterday (Tuesday) stated that he intends to announce his final decisions by tomorrow (Thursday).
Commenting on the new offer, 21st Century Fox said: “As the founding shareholder of Sky, we have remained deeply committed to bringing these two organisations together to create a world-class business positioned to deliver the very best entertainment experiences well into the future.
“We strongly believe that a combined 21CF and Sky will be a powerful driver for the continued growth and vibrancy of the UK and broader global creative industries. The enhanced scale and capabilities of the combination will enrich Sky’s ability to continue on its mission for years to come, especially at a time of dynamic change in our industry.
“This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world, but none of whom have demonstrated the same local depth of investment and commitment to the UK and to Europe.”
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. The deal with Disney would include approximately $35.7bn in cash. Completion of the Sky acquisition is not a condition to completion of the Disney transaction.
Regulatory scrutiny has held up Fox’s bid for the 61 per cent of Sky that it does not already own for 18 months. Sky is a major sports broadcaster in the UK, as well as Austria, Germany and Italy.