Comcast triumphs in auction for Sky with £29.7bn bid
21st Century Fox and Walt Disney beaten in a deal that will redraw global media landscape
Comcast has triumphed over 21st Century Fox and Walt Disney in the auction for Sky with a successful £29.7bn ($39bn) bid in a deal that will redraw the global media landscape.
Comcast’s £17.28 a share offer came in higher than a rival £15.67 offer from Fox, which was backed by Disney. The sale will bring an end to Rupert Murdoch’s long association with Sky, which he founded in 1989 — and which ushered in the pay-TV era in the UK.
With operations in Germany, Italy, Austria and Ireland, as well as the UK, Sky has 23m subscribers and will give Comcast a powerful launchpad for new digital services in an era increasingly shaped by streaming providers such as Netflix and Amazon.
The auction, which was overseen by the UK’s Takeover Panel under rules agreed by the competing companies, also concludes one of the UK’s longest running takeover battles.
It started in December 2016 when Mr Murdoch’s Fox group made a £10.75 a share offer for Sky that valued it at £18.4bn.
With the tabloid newspaper phone hacking scandal and the behaviour of some journalists at Murdoch newspapers still fresh in minds, the UK government was under pressure to ensure that a sale of Sky did not hand Mr Murdoch more influence of the UK’s media market. A lengthy regulatory review process then followed.
Ofcom, the UK’s media watchdog, and then the Competition and Markets authority scrutinised the Fox offer. With the regulatory review process dragging on, Mr Murdoch stunned his rivals last November when he revealed plans to break up his media empire, selling most of the entertainment assets, including the movie studio and portfolio of cable channels, to Walt Disney.
That deal included Fox’s 39 per cent stake in Sky, putting Disney in the driving seat to acquire the rest of the company. But Comcast, the US cable giant and owner of NBC Universal, crashed the party, making a rival bid for the Fox assets, which it later dropped — but not before Disney had to increase its own offer. Comcast then made a separate bid for Sky.
When Saturday’s auction started, the Disney-backed Fox offer was worth £14 a share with Comcast offering £14.75. Earlier rounds failed to yield a winner, with Comcast prevailing in the third round, when the bidders submitted best and final offers.
Sky’s management team, led by Jeremy Darroch, chief executive, is expected to stay with the company, which will give its new owner significant cash flow and a big European footprint.
The £29.7bn sale makes Sky the most valuable listed UK company ever acquired by an international buyer, beating the previous bar set by Arm Holdings, which was acquired by SoftBank in 2016 for £24bn.