U.S. cable giant Comcast has offered $31 billion for Sky, threatening a plan hatched by Rupert Murdoch’s Fox and Bob Iger’s Walt Disney to seize control of Europe’s biggest pay-TV group.
The world’s biggest entertainment company and owner of NBC and Universal Pictures, said on Tuesday it had proposed to offer 12.50 pounds per share for Britain’s Sky, significantly more than the 10.75 pounds Fox has agreed to pay for it.
Disney has agreed to buy Sky from 21st Century Fox, along with other assets, in a separate $52 billion follow-up deal.
Comcast’s all-cash, unsolicited offer pits CEO Brian Roberts against Murdoch, the 86-year-old tycoon who helped to launch Sky and pioneer pay-TV in Britain. Iger is also a long time rival after Comcast tried and failed to buy Disney in 2004.
“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast Chief Executive Roberts said, sending Sky’s shares up as much as 21 percent to 13.34 pounds and indicating that investors expect a bidding war.
Comcast’s appearance in the already complex Sky drama could prompt a higher Fox offer, Disney making its own direct bid for Sky or Comcast emerging as the unexpected victor.
Media owners have been forced into increasingly aggressive deals after online groups Netflix Inc and Amazon.com Inc. prompted many customers to ditch subscriptions.
Comcast bid $60 billion last year to clinch a deal with Murdoch’s Fox, before losing out to Disney.
Sky, which provides sports programming, films and broadband to 23 million homes across Britain, Ireland, Germany, Italy and Austria, urged its investors to take no action since the approach did not represent a firm offer.
Murdoch’s Fox agreed to buy the 61 percent of Sky it did not already own in a cash deal in December 2016, but the takeover has been repeatedly held up by regulators over concerns the media tycoon wields too much influence in Britain.
The shares had been trading above the asking price since Sky this month agreed to pay less than expected for Premier League soccer rights, boosting its future earnings and prompting investors to demand a higher offer.
It also attracted the attention of U.S. hedge fund and activist investor Elliott, which has built up a 2.5 percent stake in Sky in recent weeks.
Hedge fund manager Crispin Odey, a former son-in-law of Murdoch who holds 1 percent of Sky, said he expected a counter offer and speculated whether Disney could make a direct bid for Sky to avoid Fox’s regulatory problems.
“Once you’re in a bidding war, it’s not about fair value, it’s about what do you think it’s worth,” Odey added.
