The bidding war for Sky Plc has gotten hotter with Comcast topping the higher offer from the Murdoch family’s 21st Century Fox.
Fox had revealed on Wednesday a higher, $US32.5 billion offer for Sky.
Comcast upped the ante after trading on Wednesday had ended saying it was now prepared to offer $US34 billion, up from its original offer of $US31 billion, and well above the original offer from Fox around $US26 billion.
Comcast’s new proposal £14.75 a share for Sky compared to the new offer price from Fox of £14 and Comcast’s former offer of £12.50 and the original Fox offer in late 2016 of £10.75
Comcast said it has committed financing available to satisfy the full cash consideration payable to Sky shareholders.
Fox will now have to think seriously about an even higher offer as there are a swag of hedge funds owning Sky shares who will determine the success of the bid.
It noted that it has already received relevant regulatory approvals in the EU, Austria, Germany, Italy, and Jersey. Comcast expects to complete the acquisition before the end of October 2018.
Sky is still waiting for the final approval from the UK government. Comcast says it will be in a position to send out its offer today, July 13.
Presumably the new UK Culture and Media Minister, Jeremy Wright will clear Fox’s offer in the next day as the previous minister, Matt Hancock planned (he was shifted to another portfolio in the cabinet reshuffle on Monday)
The higher offer now puts the wood on Sky’s independent directors to switch their recommendation to Comcast after backing the higher Fox offer.
Disney has agreed a $US71 billion takeover of Fox’s entertainment assets, including its 39% stake in Sky, and will take full ownership of Sky if Fox succeeds with its bid. Comcast is currently also working on a counter proposal to top Disney’s deal with Fox.
If Fox buys the remaining stake in Sky prior to completing the Disney deal, Disney would take full-ownership of the British company upon completion of the larger transaction.
Under Fox’s latest proposal it will sell Sky News to Disney, and provide a Disney-owned Sky News channel with funding of at least 100 million pounds a year for 15 years. This would meet US regulators’ criteria to approve the deal.
