Comcast lobs grenade at Fox-Disney deal with higher bid for Sky broadcasting

‘We would like to own the whole of Sky’

Comcast Corporation has announced a possible all-cash offer of £12.50 for each Sky share to be made by Comcast for the entire issued and to-be-issued share capital of Sky plc.

The proposal represents a premium of approximately 16% to the current Twenty-First Century Fox (21CF) offer price of £10.75 for each Sky share that 21CF and its affiliates do not already own and a premium of approximately 13% to the closing price of £11.05 per Sky Share on February 26 2018, being the last business day prior to the date of the announcement.

21CF was bidding for Sky ahead of selling a range of assets to Disney, including its Sky shareholding. It seems this Comcast offer could trigger a bidding war for the European broadcaster.

Highlights of the proposal:

• Possible all-cash offer of £12.50 per share, premium of 16% to the current 21CF offer
• Minimum acceptance condition of 50% plus one share
• Confident in receiving all necessary regulatory approvals in a timely manner
• Strategic opportunity to acquire a leading content and distribution business in the UK and Europe
• Specific intentions to maintain a strong presence in the UK for the combined business via continued investment in creative industries in the UK and support for high broadcasting standards and news impartiality in the UK

Commenting on the proposal, Brian L. Roberts, chairman and chief executive officer of Comcast, said:

“We think Sky is an outstanding company. It has 23 million customers, leading positions in the UK, Italy and Germany, and is a consistent innovator in its use of technology to deliver its customers a great experience. Sky has a proud record of investment in news and programming. It has great people and a very strong and capable management team.

“We think that Sky would be very valuable to us as we look to expand our presence internationally.

“We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares. We are confident that we will be able to receive the necessary regulatory approvals. If successful, the acquisition will enhance our free cash flow per share in the first year.

“The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe. We intend to maintain and enhance Sky’s business.

“Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25%.

“Comcast recognises that Sky News is an invaluable part of the UK news landscape and the company intends to maintain Sky News’s existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards. While Comcast does own a substantial international operation in the UK, with more than 1,300 employees, the company has only a minimal presence in the UK media market. Comcast therefore does not believe that this proposal should create any media plurality concerns in the UK.”

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