Murdoch's 21st Century Fox Ups Sky Bid to Beat Rival Comcast

Murdoch's 21st Century Fox Ups Sky Bid to Beat Rival Comcast

Shares in Sky SKYB.L jumped higher on Thursday after Comcast CMCSA.O submitted a $34 billion (25.74 billion pounds) bid for the group just hours after Rupert Murdoch raised his offer, escalating a trans-Atlantic bidding war for the European pan-TV group.

Fox, which has been trying to buy the pan-European group since December 2016, offered to pay 14 pounds per share, a 12 percent premium to Comcast's earlier offer.

A person familiar with the situation said Comcast believed the deal would still be accretive to its cash flow in the first year of completion at the new price it had offered.

Hedge funds including Elliott have bought into Sky in recent months and other vocal shareholders such as Crispin Odey have demanded that the independent directors secure a better deal. If true, this would be in violation of security rules and may well block - or at the very least stall - Disney's acquisition of 20th Century Fox and its precious entertainment assets. Sky's shares closed at 15.01 pounds on Tuesday, implying shareholders think the battle is not yet over.


20th Century Fox recently set July 27 as the new date for stockholders to vote on the sale of their many film and television assets to The Walt Disney Co., which has also recently received US anti-trust approval. It now remains to be seen whether Comcast will beef up its bid even further to beat Fox's richer offer.

Of course, there's still time for Comcast to make yet another counteroffer, forcing Disney to increase its bid once more. Comcast faces a deadline of Friday to put its offer to Sky shareholders. News Corp., which is controlled by the Murdochs, withdrew its bid for Sky soon after.

"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.

But Fox must promise to divest Sky News to assuage concerns over Fox controlling too much of the country's news media. 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 United Kingdom media landscape.

Related Articles