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Fox to offload $15bn Sky stake

21st Century Fox has confirmed it will offload its 39% stake in European satcaster Sky, after losing out to US giant Comcast in an auction for ownership of the business at the weekend.

Rupert Murdoch

Rupert Murdoch’s Fox has long wanted to buy the 61% of Sky that it doesn’t already own, but after an earlier bid was scuppered by a phone hacking scandal engulfing his newspapers, his latest attempt failed after Comcast’s US$39bn bid on Saturday.

Sky has recommended its shareholders accept Comcast’s offer of £17.28 a share for control of London-based Sky, which beat the £15.67 a share offer by Fox.

21st Century Fox has now issued a statement confirming that it intends to sell its 39% holding to Comcast for the agreed price, which will bring in £11.6bn (US$15bn). The company is itself in the midst of selling many of its assets to The Walt Disney Company, and it confirmed that Disney had consented to the decision.

“In light of the premium Comcast has agreed to pay for Sky, we and Disney have decided to sell 21CF’s existing 39% holding in Sky to Comcast,” Fox said. “We congratulate Comcast on their pending acquisition.

“When we launched Sky in 1989 it was four channels produced from a prefab structure in an industrial park on the fringes of west London. We bet – and almost lost – the farm on launching a business that many didn’t think was such a good idea. Today, Sky is Europe’s leading entertainment company and a world-class example of a customer-driven enterprise.

“This achievement would not have been possible without decades of entrepreneurial risk-taking and the commitment of thousands of colleagues, creators and dreamers. For nearly 30 years we have invested to create a dynamic and exciting business that has produced excellent returns for shareholders and has become one of the most admired companies in Europe.

“We have provided greater choice and better value for families across Europe, and we have created more than 31,000 jobs across the continent. Today, Sky brings customers better TV than ever before and better entertainment experiences than many ever thought possible.”

Saturday’s auction brought to an end a dramatic bidding war between the two US giants for Sky, after Fox initially made a £10.75-per-share offer in December 2016. While Disney was in the process of acquiring an array of assets from 21st Century Fox, including 39% of Sky, it had initially looked set to take over the 61% of Sky that Fox did not already own.

Then NBCUniversal-owner Comcast stepped in and began successively topping Fox’s offers. In July, Fox increased its offer to £24.5bn but this was topped by a £26bn bid from Comcast. The bidding war between Disney-backed Fox and Comcast added at least US$8bn to the Sky pricetag and hands Comcast a sizeable European pay TV business with 23 million subscribers.

Brian Roberts, chairman and CEO of Comcast, said at the weekend: “This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally. We couldn’t be more excited by the opportunities in front of us. We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018.”

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