Sky accepts higher 21st Century Fox bid

Gladys Abbott
July 12, 2018

Fox's new bid values the whole of Sky at £24.5 billion, beating an offer of £22 billion from United States (US) cable giant Comcast for the satellite TV group.

Comcast believes finding such partners will not only allow it to argue that it can win antitrust approval for the Fox assets as easily as Disney, but will also boost its finances as its prepares to make a second all-cash offer later this month, the sources said. Now that the Disney deal is looking more and more certain, focusing on Sky - and winning that deal - would give them a better reach into Europe as well as blocking Disney from total control of that company.

Fox has increased its bid by just over 30% since its first offer in December 2016.

Comcast may instead try to get the Sky network, which Fox now owns 39% of the company. Sky is a pawn in a wider contest between Comcast and Walt Disney Co. for the bulk of Murdoch's media empire, as the USA media giants try to take on powerful digital rivals like Netflix Inc.

Sky's shares were up 3 percent at 15.38 pounds on Thursday, valuing it at 26.6 billion pounds, or $35 billion, as investors bet the battle has further to run for a group which owns a slate of top sport and original drama content.

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The battle for Sky is raging while a separate tussle for Fox's entertainment assets simmers on between Comcast and Disney. Comcast is said to be ready to negotiate with the feds on the number of Fox RSN's it would have to divest as some of them may overlap with Comcast's NBC Sports regional networks.

"Fox coming back in for Sky isn't a surprise in itself, but the fact the offer is slightly behind what some had anticipated brings another twist", said George Salmon, equity analyst at Hargreaves Lansdown.

Murdoch's company still faces significant regulatory battles in Britain, including the culture secretary's statement that Fox would have to divest itself of Sky News to win government approval because of concerns about media plurality.

Murdoch had previously tried to buy Sky in 2011 when a phone hacking scandal at his News of the World tabloid sparked a political backlash over his role in Britain.

"There are enough sub-plots in the race to acquire Sky to commission a primetime drama", Salmon said.

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