Comcast bids $31bn for Sky

NBCUniversal owner Comcast has offered £22.1bn (US$31bn) to buy European pay TV operator Sky, challenging an existing offer from Rupert Murdoch’s 21st Century Fox.

Brian Roberts

The US cable giant’s bid of £12.50 per share was 16% higher than the existing £10.75 offer from Fox, which has become mired in regulatory troubles. It has also cast Fox’s own takeover by Disney into doubt.

Comcast CEO Brian Roberts said in a statement he “would like to own the whole of Sky and will be looking to acquire over 50% of the Sky shares.”

The offer comes more than a year after Fox made its initial bid to take control of the 61% of Sky that it doesn’t already own in a £11.7bn deal. That came six years after the hacking scandal derailed its first takeover attempt in 2011.

The latest deal has faltered, however, after UK regulator the Competition and Markets Authority (CMA) found the deal was not in the public interest, citing concerns over media plurality.

It found that the deal would hand too much power over the UK’s news agenda to Murdoch and his family, who also own UK newspapers including The Times.

Fox, meanwhile, is in the midst of selling off a large swathe of its operations to Disney, with Sky expected to have become part of the Mouse House if the former deal goes ahead.

That was expected to ensure that concerns over plurality would fall away, although the Fox-Disney deal is expected to take at least 12 months as US regulators scrutinise the arrangement.

Comcast’s swoop on Sky comes 14 months after Fox originally agreed a price for Sky, which operates pay and OTT services across Europe.

Roberts said that the UK “is and will remain a great place to do business” and added that Comcast would use Sky as “a platform for our growth in Europe.” He also said Comcast could be co-owners of the pay operation with Fox or Disney.

Comcast’s interest range form US broadcast network NBC, Hollywood studio Universal Pictures and DreamWorks Animation. It also operates a swathe of US-focused cable operations and is behind numerous global producers, including Downton Abbey producer Carnival Films and NBCUniversal International Studios (NBCUIS).

NBCUIS moved veteran executive Jeff Wachtel to head the business in November, replacing the outgoing Michael Edelstein.

Shares in Sky jumped almost 20% in early trading to £13.10, higher than Comcast’s own bid, suggesting that investors believe Murdoch will be forced to raise his own offer.