Comcast outbids Fox with $40 billion winning offer for Sky

Rupert Murdoch's Fox was seeking to buy remaining 61 per cent of Sky it doesn't already own

AL BELLO GETTY Rupert Murdoch's Fox was seeking to buy remaining 61 per cent of Sky it doesn't already own

Yesterday saw Murdoch's Fox, and USA cable-TV giant Comcast, counter-bidding.

Fox's highest offer was worth £27.6 billion, Britain's Takeover Panel said in a statement.

In December, Disney chief executive Bob Iger, described Sky as the "crown jewel" of the Fox assets in an interview with Bloomberg TV. With Sky in the fold, Comcast's global revenue will go from 8% of its total to 25%, according to Imperial Capital.

Comcast operates a more integrated model in the U.S. which includes cable broadband, telephony and free to air television along certain parts of the East Coast.

In addition to its satellite TV service, Sky offers a video streaming option called Now TV, which has about 2 million subscribers.

'This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally. Since Fox made its first bid almost two years ago, it has agreed to sell a major chunk of its business - including its existing 39% Sky stake - to U.S. entertainment behemoth Walt Disney.

"Sky is a remarkable story and we are proud to have played such a significant role in building the incredible value reflected today in Comcast's offer", Fox said.

Comcast said it hoped to complete the takeover by the end of October. Comcast estimates that owning Sky will create $500 million in synergies, partly through selling Sky content in the US and NBC programming in Europe.

Fox's holding, which Comcast's offer values at more than $15 billion, stems from Murdoch's role in the creation of the company almost three decades ago.

"Consumers are no longer buying whole cable packages but are rather going for 'skinny bundles" with SVODs (subscription video on demand) such as Netflix, which offer content at a lower price point; acquiring Sky means that Comcast can also diversify its route to market'. It now must decide whether to sell its stake or remain a minority shareholder.

Some politicians have opposed a deal, citing concerns about the influence Murdoch would wield over the UK's news agenda.

That bid was scuppered by the phone-hacking scandal that engulfed Mr Murdoch's United Kingdom tabloid newspapers and tarnished the firm's reputation.

Fox made a string of concessions to assuage those worries and land a company that serves 23 million households in Britain, Ireland, Germany, Austria and Italy. But that was not the case, and Sky's independent committee, which includes Darroch and other senior executives, has backed the Comcast offer. "Sky has never stood still, and with Comcast our momentum will only increase", he said.

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