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Fox reports strong financials as Sky takeover battle continues

Fox reports strong financials as Sky takeover battle continues

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By: TV Sports Markets team

Posted:
9 Aug 2018
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US media company 21st Century Fox has recorded significant increases in full-year profit and revenue, while it has moved to buy itself extra time in the ongoing takeover battle for pan-European pay-television broadcaster Sky.

Fox’s financial results for the period ending June 30, 2018 detailed a rise in profits of almost 50 per cent to $4.48bn (€3.82bn). Revenue for the year rose by six per cent from $28.5bn to $30.4bn.

Fox pointed to the performance of pay-television broadcaster Star India as a factor in its strong results. In September, Star ousted Sony as the main rights-holder to the Indian Premier League after securing the global television and digital rights to the Twenty20 competition from 2018 to 2022.

Aided by its inaugural season of the IPL, further penetration of its Hotstar platform and continued general entertainment growth, Fox said Star nearly doubled its profit contributions year over year.

Commenting on the results as a whole, 21st Century Fox executive chairmen Rupert and Lachlan Murdoch said: “The outstanding shareholder value created this year through our proposed transactions recognises the work we have done to position our businesses to succeed during a time of great change.

“We start a new fiscal year with tailwinds from last quarter’s double-digit topline growth across our business segments. As we move closer to combining our businesses with Disney and establishing new ‘Fox’, we are convinced that the paths we are creating for our iconic businesses will drive enduring and growing value for our shareholders.”

The announcement of the results came after Fox posted its formal offer document for control of Sky, without improving its price. Instead, Fox chose to trigger a 46-day deadline in which it can raise its current £14 (€16/$18.5) per share bid. Under British takeover regulations, Fox now has until September 22 to potentially beat the existing top offer from rival media company Comcast.

Comcast last month moved swiftly to counter the enhanced takeover offer submitted by Fox for Sky by entering a new bid to exceed that of its rival. Comcast’s move came just hours after Fox announced its improved offer and intensified the race for control of Sky. Comcast’s offer for the entire issued and to be issued share capital of Sky is worth £14.75 per share, valuing the broadcaster at approximately £25.9bn.

Fox’s 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 prior 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.

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