Comcast/Sky/Disney: wanted, dead or alive
The cable group is livin’ on a prayer
Halfway there but livin’ on a prayer? Bouffant rocker Jon Bon Jovi could have been singing about Brian Roberts, not blue-collar Americans. Comcast, the business run by Mr Roberts, grabbed a third of Sky in the market for £8.6bn on Monday. The group lodged the highest bid for the UK-listed broadcaster and broadband group at the weekend.
Any lingering doubts rival bidders had about Mr Roberts’ seriousness have evaporated, like a puff of hairspray. He craves Sky’s content, technology and European reach. These are ingredients in a possible antidote to the malady of “cord-cutting”.
Mr Roberts’ difficulty is that Fox, underbidder in the auction run by the UK Takeover Panel, already has 39 per cent of Sky. Disney has promised to purchase the stake with other 21st Century Fox media assets.
The lyrics of New Jersey’s sixth-best singer are therefore apt. Comcast needs just over 50 per cent of all Sky’s shares to gain control. UK takeover rules give it a clear run until October 11, as Jefferies notes. But unless Fox and Disney capitulate, Comcast can buy only from the 60 per cent owned by minorities. A 29.1 per cent market purchase at the £17.28 offer price means Comcast is halfway to that target.
The cable group is livin’ on a prayer because minorities with 10 per cent could deny Comcast control, through inertia or design. The shock and awe of the market purchase is meant to discourage that. Mr Roberts is telling Disney to play ball, too. He wants Bob Iger to sell into his bid via Fox. Disney’s debts are rising. Proceeds of £11.6bn would reduce them.
A disposal might also put Mr Roberts in a good mood to discuss selling Comcast’s 30 per cent of streaming service Hulu. Disney will have 60 per cent following its purchase of Fox assets. Legal threats preclude a back-to-back deal. But Hulu might naturally come up if Mr Roberts and Mr Iger meet in a month or so to josh about that nail-biting auction in London.