Comcast's Sky bid bolsters FTSE ahead of Fed comments
- Author: Eleanor Harrison Mar 02, 2018,
Mar 02, 2018, 1:19
21st Century Fox, which now owns 39% of Sky, submitted its proposal to take full control of the European pay-TV group in December 2016, but "the takeover has been repeatedly held up by regulatory concerns that Murdoch controls too much media in Britain", says Reuters.
The company would use Sky as a platform for growth in Europe, complementing its presence in London through NBCUniversal worldwide operations, Comcast CEO and Chairman Brian Roberts said.
Currently, around 9 per cent of Comcast's revenue is generated internationally but by buying Sky, it would be able to increase that proportion to 25 per cent. Sky currently has around 23 million customers globally and dominates in Italy, Germany, as well as here in the United Kingdom, which would mean that Comcast could swiftly grasp swathes of the market in which it has yet to make a splash.
"Sky has a proud record of investment in news and programming".
Hedge fund manager Crispin Odey, a former son-in-law of Murdoch who holds 1 percent of Sky, said he expected a counter offer and speculated whether Disney could make a direct bid for Sky to avoid Fox's regulatory problems.
The sudden arrival of Comcast creates some hard choices for Iger: Should he be content with Fox minus Sky, or should he entertain a costly bidding war with the USA cable company? That means Fox's 39 percent stake will not be enough to block the deal.
Fox partial ownership of Sky makes any new deal complicated, but if the Comcast offer was approved by 82% of Sky's non-Fox shareholders, it would be enough to gain the requisite controlling interest in the firm. NBCUniversal, meanwhile, operates a slew of news, entertainment and sports cable networks.
Brian Roberts, chairman and CEO of Comcast Corporation said: 'Comcast intends to use Sky as a platform for growth in Europe.
"There are many permutations to these machinations, too many to mention here, but both Disney and Comcast want this asset so I bet a bidding war does ensue", the " Mad Money " host said on Tuesday.
Comcast, the owner of NBCUniversal, has made a surprise £22 billion, or $30.7 billion, bid for Sky.
Comcast, which is based in Philadelphia, operates cable TV and internet services in the US besides owning TV channels and production studios.
Fox didn't immediately comment on the Comcast offer. "Just as with Comcast, adding more global distribution (direct to consumer) and content production is strategic to countering Netflix, Amazon, etc.", the banks' analysts said in a flash note. "The prospect of us working together and seeing where that will lead is a very exciting thought for me", added Roberts.
In a statement, Comcast said a deal would expand its global footprint "to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape".
Media tycoon Rupert Murdoch faces a multi-billion dollar battle in his quest to buy Sky television after America's largest cable company Comcast entered the bidding in a move likely to diffuse a potentially hazardous political decision being faced by the British government. Shares of Comcast, Fox and Disney fell.
Comcast and Disney are vying to purchase European broadcaster Sky.
Murdoch has sought full control of satellite-TV distributor Sky for many years.