Comcast challenges Rupert Murdoch with rival bid for Sky

Comcast just crashed Rupert Murdoch's efforts to take control of European broadcaster Sky.The US cable and ent...

Posted: Feb 27, 2018 2:22 PM
Updated: Feb 27, 2018 2:22 PM

Comcast just crashed Rupert Murdoch's efforts to take control of European broadcaster Sky.

The US cable and entertainment company has bid -12.50 per share for Sky, an offer that tops the -10.75 per share offered by Murdoch's 21st Century Fox and makes the UK-based broadcaster a prize coveted by both Comcast and its American rival Disney.

"Comcast intends to use Sky as a platform for growth in Europe," said Comcast CEO Brian Roberts. "We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky's UK headquarters."

Disney also hopes to use Sky, which has 23 million customers and major businesses in the UK, Germany and Italy, as a springboard into Europe. Last year, it bid $52.4 billion to swallow most of Fox, including Sky.

The bid from Comcast throws that into doubt, and it's not clear how Disney and Fox will respond. Comcast is a daunting rival for Fox, with far greater financial firepower. Its bid values Sky at -22 billion ($31 billion), roughly -3 billion ($4.2 billion) more than Murdoch's offer.

Disney, Fox and Sky did not immediately return requests for comment on Tuesday.

Sky shares soared more than 21% on news of the new bid. In recent weeks, the stock had been trading above the -10.75 offered by Fox after Sky negotiated a lower price for broadcast rights to Premier League football matches.

Premier League games are the kind of content that Comcast and Disney are hungry to purchase. Both companies, along with wireless operator Verizon, held discussions last year with Fox about a potential acquisition that would add valuable entertainment assets to their portfolios.

At a time when US consumers are cutting their cable subscriptions and spending more time online, Disney and Comcast are both seeking to broaden their geographical footprint. Comcast said Tuesday adding Sky to its business would increase international revenues to 25% from 9%.

Sky shares were trading above -13.30 in London on Tuesday, a sign that investors are expecting another bid to materialize.

"This is only the start of a competitive process," wrote analysts at Jefferies, who suggested that Disney could respond by tabling a direct offer to Sky shareholders.

Murdoch has been trying for years to take control of Sky.

Last month, a UK regulator advised that the government should block the Fox bid to buy the remaining 61% of Sky because it would give one family -- the Murdochs -- too much control over media in the UK.

Related: Fox steps up efforts to placate UK regulators

Fox has since proposed several measures to try to assuage the regulator's fears over the Murdochs' potential influence.

Rupert Murdoch and one of his sons, Lachlan Murdoch, are Fox's two co-chairmen. The other son, James Murdoch, is CEO. The family also controls News Corp., which owns three of Britain's biggest newspapers: The Sun, The Times and The Sunday Times.

-- CNN's Ivana Kottasov- contributed reporting.

-- Correction: An earlier version of this story misstated the Sky valuation implied by Comcast's offer.

Minnesota Coronavirus Cases

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Ramsey7827270
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Washington222748
Olmsted179123
Nobles17777
Scott163422
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Freeborn3611
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Steele3562
Benton3253
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Carlton1470
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Iowa Coronavirus Cases

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Woodbury377052
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Linn245689
Johnson213820
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Buena Vista180012
Scott176815
Dubuque173431
Marshall145627
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Story118915
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Muscatine86048
Webster8498
Crawford7393
Cerro Gordo65617
Sioux6533
Warren5861
Tama55729
Jasper48427
Wright4821
Plymouth47912
Clinton4344
Dickinson3844
Louisa37814
Washington30510
Boone2723
Franklin25512
Hamilton2551
Bremer2337
Clarke2063
Clay2021
Carroll2012
Des Moines1992
Emmet1934
Shelby1881
Hardin1860
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Jackson1601
Poweshiek1608
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Henry1404
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Cedar1351
Jones1352
Butler1312
Lee1294
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Hancock1242
Humboldt1241
Delaware1231
Lyon1232
Pocahontas1212
Harrison1131
Cherokee1101
Clayton1093
Winneshiek1021
Page1000
Taylor1000
Iowa981
Kossuth970
Mills941
Monona920
Winnebago920
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Fayette900
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