Fox upped its bid to buy the rest of Sky in a deal that values the pay-TV company at $32.5 billion, topping a rival $31 billion offer from Comcast. With Disney so far trumping Comcast’s bid for a raft of Fox’s assets, the U.S. cable giant is seen as likely to focus its efforts on wresting Sky away from Fox and adding a valuable international asset to its portfolio.
Comcast chairman Brian Roberts is in Sun Valley, Idaho, this week for the annual Allen & Co. conference, a gathering that has brought him together with Fox chief Rupert Murdoch. Disney chairman-CEO Bob Iger is also expected to attend the mogul summit. Roberts has been tight-lipped with media at the event, but chatter about Comcast’s shift in focus to Sky is building among conference-goers.
Fox unveiled its new bid Wednesday morning London time, before the British government has even greenlit a Fox takeover of Sky after months of regulatory scrutiny, a decision expected to be announced by Thursday.
The improved offer from Fox for the 61% of Sky it does not already own sets a price of £14 per share, which is a 30% rise from its original offer in December 2016 of £10.75 per share and puts the overall valuation of Sky at £24.5 billion ($32.5 billion). The new offer also bests Comcast’s current tender of £12.50 per share.
“As the founding shareholder of Sky, we have remained deeply committed to bringing these two organizations together to create a world-class business positioned to deliver the very best entertainment experiences well into the future,” Fox said in a statement. “We strongly believe that a combined 21CF and Sky will be a powerful driver for the continued growth and vibrancy of the U.K. and broader global creative industries. The enhanced scale and capabilities of the combination will enrich Sky’s ability to continue on its mission for years to come, especially at a time of dynamic change in our industry.”
Fox said its ownership of Sky would position the satcaster “to compete within an environment that now includes some of the largest companies in the world, but none of [which] have demonstrated the same local depth of investment and commitment to the U.K. and to Europe.”
Sky currently operates in Britain, Ireland, Germany, Austria and Italy. It had previously approved Fox’s takeover of the company and recommended that shareholders do the same, but withdrew that blessing after Comcast unveiled its counteroffer in April. With the new Fox bid, the Sky board has reinstated its backing of Fox’s courtship.
The battle for Sky between Fox and Comcast is playing out against the larger bidding war between Comcast and Disney for a chunk of Fox’s entertainment assets. The 39% stake in Sky currently owned by Fox is part of that larger prize, and both Comcast and Disney see the pan-European pay-TV company as one of the most valuable elements of the deal.
Indeed, the speculation is that, should Disney prevail in the fight for Fox, Comcast would redouble its efforts to nab Sky, which would add a significant new revenue stream and more content to the U.S. cable giant’s portfolio. But Fox’s move Wednesday shows its own determination to control all of Sky – a long-cherished goal of Rupert Murdoch’s. The media mogul’s previous effort to buy out the rest of Sky foundered amid Britain’s 2011 phone-hacking scandal, which hardened opposition to Murdoch’s influence over the U.K. media landscape.
That opposition still runs strong among many British politicians and activists. The current bid by Fox has been stalled for months as first Britain’s media regulator and then its competition watchdog reviewed the politically sensitive matter, examining whether Fox’s ownership of Sky would concentrate too much power in Murdoch’s hands and whether the Murdoch family would be “fit and proper” owners.
Last month, the British government said that it would be inclined to clear the Fox bid if the company committed to securing the future and ensuring the independence of the well-respected Sky News channel. Fox has duly announced such measures; Disney, too, has stepped in to say it would keep Sky News funded and editorially independent. Britain’s new culture secretary, Jeremy Wright, is expected to announce the government’s decision by Thursday.
The British government has already green-lit Comcast’s bid for Sky, saying that the bid posed no public-interest concerns.
Cynthia Littleton contributed to this report.