Comcast Makes Offer To Buy Sky, Challenges Murdoch's 21st Century Fox

The London headquarters of Sky the target of a bidding war between Comcast and Twenty First Century Fox

United Kingdom regulators have put 21st Century Fox through the wringer over the past year as they assess whether the company is not only "fit and proper" to take over all of Sky, but also how the deal might affect the "plurality" of the media market in the United Kingdom.

Comcast, a US$184 billion media giant which owns NBC and Universal Pictures, said it was offering 12.50 pounds per share, significantly higher than the 10.75 pounds per share agreed by Fox.

Comcast's move appears timed to capitalize on the trouble Fox has had in convincing British regulators to approve its bid to buy the 61 percent of Sky it does not already own. He added: "We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares".

That takeover has already been delayed by concerns for media plurality in Britain and whether Murdoch would be a "fit and proper" owner of such an important broadcaster. Mr Murdoch is also chairman of News Corp, owner of The Times.

The transaction would increase Comcast's worldwide revenues from 9% to 25% of the company's revenues, and would boost its free cash flow per share in the first year after the transaction is finalized, he added. "We look at Sky as a media company", rather than a satellite TV distributor.

21st Century Fox restarted takeover plans at the end of 2o16 but has repeatedly run up against regulatory hurdles.

The company recently splurged £3.57bn to secure the lion's share of the rights to screen top level English football from the Premier League this month. He also said that there would be expanded opportunities to distribute Sky and NBC content across both the US and the United Kingdom.

"Sky shares are now trading 2% above the Comcast offer price, so the market clearly smells the scent of some more action before this saga draws to a close".

Sky declined to comment while representatives for Fox and Disney didn't immediately respond to requests for comment.

It said its "minimal presence" in United Kingdom media meant there would be no concerns about plurality - essentially diversity of opinion. If the deal were to happen, Comcast would also gain a multi-national OTT presence with Now TV, which just launched a new streaming stick for the contract-free service. But U.K. regulator have feared what he would do with that media concentration, especially because his media companies and newspapers have been plagued by scandals. On a trip to the United Kingdom in November with Dave Watson, head of Comcast Cable, Roberts suggested jumping in a taxi and going to a mall to get an in-store demo of Sky's products.

"We were really terribly impressed", Roberts said.

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". It is likely, for example, to force Fox to offer a higher price for Sky, which would cause Disney to review its own bid for Fox.

Comcast's $31 billion bid to buy United Kingdom broadcaster Sky is not just an attempt to thwart Disney or to expand globally.

As lead advisers to 21st Century Fox, Allen & Overy's team is led by co-head of antitrust Antonio Bavasso, corporate partner David Broadley and M&A partners Seth Jones and Simon Toms.



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