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Comcast Makes $31 Billion Offer for Sky

02 March 2018

Sky shares have surged after United States media giant Comcast lined up a showdown with 21st Century Fox by mounting a £22.1bn takeover approach for the UK broadcaster.

However, since the bid for Sky was launched, 21st Century Fox has agreed to sell many of its assets, including Sky, to Disney.

The Competition and Markets Authority is now investigating Fox's takeover bid after provisionally declaring that any move toward full ownership of Sky "would not be in the public interest".

It has also pledged to ensure the future of Sky News, a flashpoint in Fox's £11.7bn takeover bid because of competition fears centring on Mr Murdoch's ownership of The Sun, The Times and The Sunday Times newspapers.

"Sky and Comcast are a ideal fit: we are both leaders in creating and distributing content", Comcast Chief Executive Officer Brian L. Roberts, 58, said.

'Adding Sky to the Comcast family of businesses will increase our worldwide revenues from 9% to 25% of company revenues'.

"Indeed the fact that Sky shares were already trading at 30p above Fox's offer price tells us the market was expecting an improved offer from somewhere". That valuation sees Fox value Sky at £18.5 billion.

"At the moment, Comcast does have presence in these markets mainly through its NBC Universal film and TV assets but this would give it a very powerful distribution pan-European network".

Anne Lambert, chair of the independent investigation group, said: "Media plurality goes to the heart of our democratic process".

Comcast said it has made an offer to buy Sky that is 16% higher than 21 Century Fox's bid for the European satellite broadcaster.

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'Disney chief executive [Bob Iger] has described Sky as the "crown jewel" asset among the Fox operations he is seeking to acquire.

Comcast's proposed cash offer is a 13% premium of Sky's closing share price of £11.05 on Monday, and higher than Fox's bid of £10.75 a share.

Also advising 21st Century Fox are NY corporate partners Howard Ellin and Brandon Van Dyke from Skadden, Arps, Slate, Meagher & Flom, as well as Simpson Thacher & Bartlett partners Patrick Ryan and Sinead O'Shea.

"As it is, Comcast has thrown its hat into the ring and is now seeking to meet with the Sky directors to flesh out the deal".

Representatives of Fox and Disney couldn't immediately be reached for comment early Tuesday.

Roberts said the strategic benefits of the deal to Comcast are growth in Europe, an expanded content portfolio and larger customer base of 52 million, all of which create "meaningful financial opportunities".

Comcast boss Brian Roberts is driving a Sky-shaped wedge between Walt Disney and Twenty-First Century Fox.

Comcast also committed to maintaining Sky's London campus, supporting its investment in content, and keeping its technology and software hubs.

There was a much lower regulatory risk to the Comcast proposal, analysts said.

"Sky is going to sky", said Eric Schiffer, chief executive officer of the Los Angeles private equity firm Patriarch Organization.

Comcast Makes $31 Billion Offer for Sky