Friday, July 20, 2018

Business

Fox strikes $32.5B deal for Sky in bid to outdo rival Comcast

LOS ANGELES — Rupert Murdoch’s 21st Century Fox swooped in Wednesday with a higher bid for Sky that values the London pay-TV company at $32.5 billion. The move was designed to keep the popular satellite television service out of the hands of Fox rival Comcast Corp.

The battle over Sky is just one front in a larger tug-of-war to determine which U.S. media company — Comcast or the Walt Disney Co. — wins the bulk of Fox’s entertainment assets.

Fox already owns 39 percent of Sky. Murdoch’s company has been struggling to buy the remaining 61 percent since 2016 — long before Murdoch envisioned selling his company. In December, Murdoch agreed to sell the bulk of his company to Disney — including Fox’s stake in Sky.

Comcast, however, is trying to spoil those plans.

In February, the Philadelphia cable giant attempted to poach Sky with a $31 billion offer that was substantially higher than Fox’s original bid. Comcast formalized its offer in April.

On Wednesday morning, Fox upped the ante with a $18.58-per-share offer for Sky. The new bid came just two days before a deadline set by the British government for Comcast to finalize its deal.

Independent shareholders accepted the new Fox bid, which tops Comcast’s offer of $17.44 a share. Now, Comcast must scramble to respond before Friday or risk losing the prize.

Sky has nearly 23 million customers in Britain, Ireland, Germany, Austria and Italy — fertile ground for any U.S. media company with global ambitions. Sky also owns TV channels, including news and sports channels that hold key Premier League soccer rights. Its shares have surged since Comcast announced its interest.

Fox hopes to consolidate its Sky bid in the third quarter.

In the larger battle, Fox’s board accepted Disney’s June offer of $71 billion for much of the company, including the Los Angeles-based 21st Century Fox movie and television studios, FX, regional sports networks and international assets, including the 39 percent stake in Sky. Disney has agreed to pay the debt that Fox would incur buying the remaining 61 percent, should Fox be allowed to consolidate Sky.

Fox shareholders are expected to vote on the Fox-Disney deal July 27.

That means time is running out for Comcast, which also wants the Fox assets.

Disney currently has the edge because its $71-billion offer trumped Comcast’s most recent $65-billion proposal. Comcast must counter before July 27.

Tribune News Service


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