Published: Thu, April 26, 2018
Money | By Bruce West

Sky reconsiders Fox offer after Comcast bid

Sky reconsiders Fox offer after Comcast bid

Rupert Murdoch's long-held dream of buying Sky, the British TV giant, ran into another roadblock on Wednesday when Comcast formalized a $31 billion offer for the broadcaster.

Britain's competition regulator is conducting an investigation into whether Fox's bid for Sky would give Murdoch and his family - who already own several other media titles in the United Kingdom - too much control over the country's news media.

Comcast chairman and CEO Brian Roberts said the company had set an acceptance condition of 50% plus one share, and that he hoped Sky's independent directors would recommend the proposal.

Comcast has confirmed that under the terms of its acquisition, Sky shareholders will be entitled to receive £12.50 in cash for each Sky share.

"Comcast believes that, combined, Comcast and Sky will create a business equipped to compete more effectively in a rapidly changing and highly competitive industry", the company said.

Hedge fund Elliott has taken a stake of nearly 3 percent in Sky, according to its latest filing, and other shareholders have also argued that Disney's agreement to buy Fox implies a higher value for Sky.

Several shareholders have argued the initial offer undervalued the shares particularly given some positive developments for the stock, most notably a good outcome from the latest round of bidding on Premier League TV rights. A United States company - either Comcast or Disney - will end up owning Sky. Sky will be our platform for growth across Europe.

In a move to address those concerns, the Comcast offer states the USA company's intention to not acquire a majority interest in any newspapers in the United Kingdom for five years, and the establishment of a Sky News board that will ensure the editorial independence of Sky News for a 10-year period. "We look forward to receiving the necessary regulatory approvals". "As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 and is now terminating the Co-operation Agreement entered into with 21CF on the same date", the Sky committee said soon after the Comcast offer was lodged.

Sky, which had agreed to a takeover by 21CF, has now ended that pact because of the superior Comcast offer.

"A further announcement will be made in due course", the statement said.

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