Comcast Confident Sky Deal Would Get Regulatory Approval, Commits to Sky News

Marcus Newton
March 2, 2018

Comcast Corp, the biggest cable operator in the U.S., has offered to pay US$31 billion to buy Sky PLC, the European pay-TV group that Rupert Murdoch's 21st Century Fox Inc has already agreed to buy.

Fox has been struggling to secure regulatory approval for its bid and some Sky holders have been agitating for a better offer after Disney's $52.4 billion agreement in December to buy most of Fox's film and TV assets, including its stake in Sky.

The deal is about the size of Comcast's transaction for NBCUniversal in 2011 and would rip Sky out of the hands of Murdoch, whose 21st Century Fox has made a competing bid to purchase the share of Sky that he doesn't already own.

The UK competition regulator has expressed concerns over the offer made by 21st Century Fox, believing the deal would give too much media power to the Murdoch family.

In 2016, 21st Century Fox bid for the almost two-thirds of Sky it does not own - but a full-takeover had been held up by United Kingdom government concerns.

In a statement on Comcast's offer, Comcast Chairman and CEO Brian L. Roberts called Sky "a flawless fit", touting its 23 million customers and key presence in the U.K., Italy, and Germany.

He also described Sky as an "outstanding company" and said he was "confident" Comcast's offer would be approved by regulators.

The prospect of a Fox takeover, however, has raised several regulatory concerns.

Comcast bid $60 billion a year ago to clinch a deal with Fox, before losing out to Disney.

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"It's obviously a huge gauntlet that's been laid down to the Murdochs in relation to their pre-existing offer", said Alice Enders, head of research at Enders Analysis.

The bid, announced Tuesday, seizes upon Twenty-First Century Fox's difficulties buying the piece of Sky that it does not already own.

He added that Sky would increase Comcast's global revenues from nine per cent to 25 per cent of the company's revenues. It has great people and a very strong and capable management. But if Comcast is successful in its bid, that partnership could be short-lived.

The US media giant has placed interest in Sky with a £22.1 billion valuation, which it says will rival the interest of 21st Century Fox.

"Disney may well extract Sky from the Fox bid, and bid for it separately", DeGroote said in an email. It remains to be seen therefore what appetite Rupert Murdoch has to pursue Sky any further.

Sky shares jumped in London trading.

"We have admired Sky for a long time", Comcast CEO Brian Roberts said in a Tuesday morning conference call with European stock analysts.

Asked to compare Sky and Dish Network, Roberts said: "I don't want to be disparaging of Dish, but I think there is no comparison to Sky".

Media tycoon Rupert Murdoch faces a multi-billion dollar battle in his quest to buy Sky television after America's largest cable company Comcast entered the bidding in a move likely to diffuse a potentially hazardous political decision being faced by the British government.

Other reports by MaliBehiribAe

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