Advanced Television

Comcast tables £26bn for Sky

July 12, 2018

Comcast has raised its bid for Sky, valuing the pay-TV giant at £26 billion and trumping yesterday’s Fox bid of £24.5 billion (€27.7bn, $32.4bn). It tops Comcast’s previous £22 billion offer in the escalating bidding war between Disney (poised to buy Fox) and Comcast.

Comcast said its upped offer has been recommended by Sky’s independent committee of directors.

It was now offering £14.75 a share for Sky compared with £14 from Fox. Shares in Sky closed 0.5 per cent lower at £14.94 in London on Wednesday.

Commenting on the increased offer, Brian L. Roberts, Chairman and Chief Executive Officer of Comcast said:
“We are pleased to be announcing a recommended increased offer for Sky today. We have long admired Sky which we believe is an outstanding company and a great fit with Comcast. Today’s announcement further underscores this belief and our commitment to owning Sky. We will be posting our offer document to Sky shareholders shortly.”

Martin Gilbert, Deputy Chairman of Sky said: “The Independent Committee welcomes this increased offer which presents an attractive premium for Sky Shareholders to the current alternative offer for the Company.
We have long recognised the unique position that Sky occupies in the European direct-to-consumer landscape and unanimously recommend this offer by Comcast.”

Fox expects the new Culture Secretary, Jeremy Wright, to give the Fox bid the regulatory go-ahead this week on condition it sells Sky News.

“Clearly Comcast are sending the message that if Disney raise their bid again they will also raise again, so don’t bother,” suggested John Colley, of Warwick Business School, Professor of Practice for Strategy and International Business. “In reality all sense of value has now disappeared from this contest. The numbers are astronomical in that this new £26 billion bid is almost twice the previous undisturbed share price, and around fifteen times the earnings. The threat of Netflix and Amazon is being used to justify paying almost anything for these assets as the old world fights the new.”

“Conventional assessments of value through financial returns are being completely lost in the scramble to buy. CEOs have access to significant liquidity which is driving deals under the rationale of the new world threat, one suspects that in the cold light of day in the years to come, there will be a day of reckoning for boards over the current wave of new world inspired deals.”

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