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Comcast tables $34bn bid for Sky

US cabler Comcast has hit back in the battle over European pay TV operator Sky by making a £26bn (US$34.4bn) bid for the company.

Rupert Murdoch

The £14.75 per share deal from NBCUniversal’s owner beats that of 21st Century Fox, which made its own £14 per share offer less than 24 hours ago. That offer valued Sky at £24.5bn and beat Comcast’s previous offer, which had valued the company at £22bn.

Comcast said its latest offer had been recommended by Sky’s independent committee of directors, adding that it had “long admired” the European-focused pay operator.

“We believe it is an outstanding company and a great fit. Today’s announcement further underscores Comcast’s belief and its commitment to owning Sky,” said the company.

Fox is still waiting for UK regulators to greenlight its bid, which would allow it to acquire the 61% of Sky that it doesn’t already own.

Complicating the deal is the fight between Comcast and Disney for a slew of Fox assets, including its 39% stake in Sky.

This could affect the cost of Sky because regulators have said they will apply a rule known as the chain principle, meaning if Comcast raises its bid for Rupert Murdoch’s Fox it could also have to pay more for Sky.

Analysts have suggested that could lead to Comcast focusing its efforts more on Sky rather than Fox as it looks to ramp up its global interests.

“There is a possibility Comcast puts a lot of chips backing its Sky bid and is less aggressive in its pursuit of Fox,” said Bloomberg Intelligence analyst Paul Sweeney, who added the cabler may “just want international scale.”

Jonathan Chaplin, an analyst at US-based New Street Research, added: “Of all the assets in the Fox portfolio, they probably view Sky as the most strategically important.”

However, Disney boss Bob Iger has previously called Sky “a real crown jewel” in the Fox assets it is trying to acquire.

The latest offers come almost two years after Fox bid £10.75 per share for Sky in late 2016, having seen its first attempt to take over the company in 2011 fail due to the UK phone hacking scandal.

Sky has pay TV and streaming operations across Europe as well as production and distribution interests.

However, the race could still have some way to go, with analysts believing the bidding could rise as high as £16 per share, valuing the pay TV operator at around £27.5bn.

Comcast is also involved in a bidding war against Disney to acquire Fox assets, having offered US$65bn for a number of its entertainment interests, including Sky.

The Mouse House responded with a US$71.3bn bid, which currently leads in that particular battle. Concerns over US regulatory obstacles have lessened since AT&T’s deal for Time Warner made it through the US legal system.

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