Published: Thu, April 26, 2018
Markets | By Josh Butler

Comcast's $31 Billion Bid For UK-Based Sky Complicates Murdoch Plans

Comcast's $31 Billion Bid For UK-Based Sky Complicates Murdoch Plans

Roberts said the Sky board's withdrawal of its support for Fox's offer was "the ideal step as far as we are concerned today". "We have long believed Sky is an outstanding company and a great fit with Comcast".

Hopes that Comcast, the biggest USA cable firm and owner of NBC and Universal Pictures, will spark a bidding war sent Sky shares rocketing up over 3%.

"The question now is whether Fox/Disney makes a knockout bid to discourage any further Comcast offer and what it thinks this level is, without breaking the bank", analysts at Liberum Capital said in a note to clients.

It has also offered to sell Sky News immediately to Disney, the USA entertainment giant, which before Christmas agreed to pay $52.4bn for Fox's entertainment assets, including its shareholding in Sky. "Comcast is gaming out the possibility of making a public case to the company's shareholders that they should reject the Disney deal, which is expected to come to a vote this summer, and opt for a Comcast tie-up instead, people familiar with the situation say".

Comcast had already bought NBC Universal back in 2011 and now it clearly fancies expanding its operations internationally.

Comcast also said it will give legally-binding commitments to maintain editorial independence at Sky News.

Murdoch's British media assets, which include newspapers The Sun and The Times, already reach a third of the country's news consumers.

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But British regulators aren't so keen on allowing Murdoch to buy the company, which would give him too much control of the United Kingdom media and is therefore "not in the public interest", the Competition and Markets Authority said earlier this year.

"With its 23 million retail customers, leading positions in the UK, Italy, and Germany, and its history of strong financial performance, we see significant opportunities for growth by combining our businesses". Generously add those to consensus estimates for Sky's operating profit in 2020, tax the lot at 18 percent, and the return on invested capital is nearly 7 percent.

"The rights may come with multibillion-pound price tags, but Sky has proven the Premier League deals are well worth the outlay".

On Wednesday, Sky also welcomed commitments the United States cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel.

The bid is yet to be given the backing of the Sky board, which is being advised by PJT Partners, Morgan Stanley and Barclays, but Comcast said it was in talks with the Sky Independent Committee "with a view to obtaining a future recommendation of the acquisition".

That is because Comcast has a minimal United Kingdom media market presence.

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