Comcast has officially gatecrashed Rupert Murdoch's Sky takeover
Let the fun and games begin. This morning Comcast did what it said it was considering doing in February and formally tabled a rival bid for Sky.
The £22 billion offer is “superior” to Rupert Murdoch’s £19 billion valuation. Comcast has officially gatecrashed the media mogul’s takeover.
Comcast’s proposal is largely unaltered but it has been polished. The commitments to fund Sky News and invest in Sky’s British business now look as strong as those made by Murdoch’s 21st Century Fox, and Comcast’s “intention” is to make them legally binding.
Comcast also puts a number on the “synergies” than can been squeezed out of the combined business ($500 million) and they can be achieved with “limited impact on headcount”.
The Independent Committee of Sky has withdrawn its recommendation of the original Fox offer made on December 15th 2016. Both Comcast and Fox will now be given time to gain regulatory approval and seduce Sky’s shareholders.
The Independent Committee’s view is that Comcast’s bid “comprehensively” addresses the public interest concerns that have slowed Fox in its tracks.
But Comcast’s CEO, Brian Roberts, admits it’s for “others to judge” if a UK review is necessary. Over to Matt Hancock, the Secretary of State for Culture, Media and Sport.
Comcast is offering £12.50 a share in cash but Sky’s shareprice is currently sitting pretty at £13.50. The market expects Murdoch to up his bid. Fox says it’s “considering its position”.
Fox already owns 39% of Sky but that doesn’t confer an obvious advantage in the battle for full control. If Murdoch does freshen-up his offer he’ll only win if he convinces a majority of Sky’s independent shareholders to accept it.
Comcast’s bid is ruthless, opportunistic and bold, qualities that Rupert Murdoch will no doubt admire.
He could roll over and accept the £12.50 on offer for his Sky shares but doing so risks the unraveling the separate deal he cut to sell Sky and much of the rest of his Fox empire to Disney.
The worst case scenario looks messy for Murdoch. He’ll surely be back with a higher offer, if the rest of Fox’s shareholders let him.