US cable-and-content behemoth Comcast issued a brazen challenge to News Corp. mogul Rupert Murdoch by offering a 22 billion pound ($31 billion) cash bid to buy Sky, challenging Murdoch’s Twenty-First Century Fox – which is trying to buy the 61% of the company that it doesn’t already own – and Walt Disney, which recently purchased nearly all of the entertainment assets once owned by the Murdoch-controlled 21st Century Fox.
Comcast’s bid comes out to GBP12.5 per share in cash for the UK broadcaster, a 16% premium to the GBP10.75 per share that Fox recently offered for the 61% of the company it doesn’t already own.
Sky shares soared nearly 20% on the news.
As Reuters points out, Sky services 23 million homes across Europe and is known for its technological innovation. Murdoch has been trying to gain 100% control of the company but has been stymied by British regulators, who have raised concerns about his stewardship stemming from the News of the World phone-hacking scandal and his already vast influence over UK media. Murdoch already owns several of the UK’s most widely circulated print publications, as well as his 39% stake in Sky, According to Reuters.
The UK competition regulator has said the bid raises media plurality concerns because taking full control of Sky News would give Murdoch’s family too much control over UK news media. The family trust controls Fox and News Corp, the publisher of the Sun and the Times.
The Guardian reported that Comcast is also exploring a bid for 21st Century Fox’s entertainment assets, which include Sky and the 20th Century Fox film studio. Such a bid could potentially disrupt the $66 billion deal that Fox struck with Disney to purchase the entertainment assets.
Sky has 1,300 employees in the UK working in broadcasting and film and TV production, including the firm behind Downton Abbey. Comcast promised that Sky’s headquarters would remain at Osterley in southwest London. In what appears to be a Murdoch snub, the company in its press release noted that it likely wouldn’t have any trouble securing the regulatory approvals.
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