Comcast Outbids 21st Century Fox For Sky At Auction

by Bamidele Ogunberu Posted on September 22nd, 2018

London, UK : Comcast Corporation offered 17.28 pounds per share in auction for British broadcaster Sky Plc, topping 21st Century Fox’s bid at 15.67 pounds per share, the U.K. Takeover Panel announced in a statement on Saturday after a rare one-day double blind auction supervised by Britain’s mergers regulator.

The Comcast offer values Sky at 29.7 billion pounds ($38.8 billion).

With a final offer that values Sky at about 29.7 billion pounds, or roughly $39 billion, the American cable giant wrested away control of Sky from Rupert Murdoch and the Walt Disney Company, which is buying most of Mr. Murdoch’s company, 21st Century Fox.

The final battle for control of Sky, a pay-television company whose reach extends across Europe, came down to an unusual one-day, three-round auction overseen by Britain’s Takeover Panel. At the end, Comcast bid £17.28 per Sky share, while Fox had bid £15.67 a share.

While Comcast emerged as the definitive winner of the auction, what remains to be seen is whether Fox — which already owns a 39 percent stake in Sky — would sell its holdings to its rival.

Still, Comcast and its chief executive, Brian L. Roberts, have succeeded in an international foray into empire building, gaining a European outpost.

At the center of the deal battle has been Sky, which Mr. Murdoch founded in the 1990s and which has since become one of Europe’s top television companies. Both bidders coveted Sky’s international reach — it has about 23 million customers in five European countries — and its mix of original content and valuable sports broadcasting rights like English Premier League soccer.

Sky has also been developing an video-streaming platform known as Q, which Mr. Roberts of Comcast has praised as impressive. That could help Comcast in its efforts to battle digital rivals like Netflix.

Rarely has a multibillion-dollar takeover battle played out in such dramatic fashion, with a government-supervised auction taking place over a weekend. But the battle for control of Sky has been full of drama for nearly two years.

Fox sought to buy the 61 percent of Sky that it did not already own in late 2016. It was the second time in a decade that the Murdoch family had tried to buy full control of Sky. Their first attempt was in 2011, but they were forced to withdraw amid a phone-hacking scandal in Britain involving a Murdoch-owned tabloid.

Fox’s 2016 offer for Sky was met with skepticism by British lawmakers and regulators, who feared giving the Murdochs too much control over Britain’s media market. Mr. Murdoch already controls news outlets like The Sun and The Times of London, and skeptics worried that full control of Sky’s in-house news arm would give him too much power.

Ultimately, Fox was allowed to bid for Sky by the British government.

Then last year, Fox agreed to sell the bulk of itself — including its 39 percent stake in Sky — to Walt Disney in a $52.4 billion deal.

Sky ultimately became a key target in a complex bidding war for Fox between Comcast and Disney. Comcast made a higher takeover offer for Sky this spring, in part to spoil Disney’s bid to acquire most of Fox. Fox — and behind the scenes, Disney, raised its offer for Sky.

Disney ultimately prevailed in the fight for Fox — but did not gain control of Sky, which Robert A. Iger, the head of Disney, had called “a real crown jewel.”

Comcast, however, did not walk away from Sky. Instead, it and Fox continued to vie for dominance, leading the Takeover Panel to announce the unusual auction that took place on Saturday.

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Bamidele Ogunberu

Bamidele Ogunberu

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