Comcast offers $31 billion for Sky, going head-to-head with Fox


Now Comcast has formally published a Rule 2.7 announcement under the City Code on UK Takeovers and Mergers announcing its pre-conditional cash offer for the entire issued and to be issued share capital of Sky.

Sky withdrew its recommendation for the £11.7 billion Fox deal following Comcast's offer but stressed that both bids are "subject to pre-conditions and neither offer is now capable of being put to shareholders".

Comcast CEO Brian Roberts said Sky's 23 million customers and leading positions in the U.K., Italy and Germany would provide "significant opportunities for growth".

Sky's independent board members are withdrawing their recommendation of the 21st Century Fox bid. The owner of NBCUniversal has formalized its $31 billion offer for Sky which now leaves the next move up to Disney. Now, Fox and Disney will likely revisit their bid amount to compete with Comcast as Fox said it remains committed to the takeover and is considering its options.

Comcast's announcement of a superior cash proposal of £12.50 per share represents a 16% increase in value over the existing 21st Century Fox offer for Sky.

Comcast may choose to leave the Disney-Fox deal alone, and it doesn't expect to make a decision in the near term, the people familiar with the situation said. Nevertheless, investors who pushed Sky shares up 4 percent to £13.57 on Wednesday are wagering that Disney and Fox will disregard financial sense.

"Our belief is it's not required", Roberts said on a call with reporters.

In January, a United Kingdom regulator advised that the government should block the Fox bid to buy the remaining 61% of Sky because it would give one family - the Murdochs - too much control over media in Britain.

The Fox-Sky deal has been held up by concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well as British newspapers including The Times and The Sun.

Comcast said it lost 96,000 video subscribers in the March quarter vs. 42,000 a year earlier. There's no switching them off. Take Rupert Murdoch's efforts to buy the 61 per cent of Sky he doesn't already control. But with Comcast offering so much more money for Sky, those offers may be moot.

Comcast had already in February tabled an informal bid worth £22 billion.

Mr. Murdoch and his family are major shareholders in Fox and in News Corp, which publishes three major British newspapers, as well as The Wall Street Journal.