Fox raises offer for Sky, topping Comcast bid
LONDON — Rupert Murdoch’s 21st Century Fox Inc. significantly lifted its offer price to consolidate ownership of Sky PLC, heating up a bidding war with Comcast Corp. for the British TV broadcaster.
Fox raised its bid for the roughly 61% of Sky it doesn’t already own by more than 30%, to GBP14 a share, in a deal that values all of Sky at GBP24.5 billion ($32.5 billion). Fox said Sky’s independent directors have agreed to the new offer.
The bid tops a rival offer from Comcast, which is competing with Fox for Sky and could come back with a higher offer, still. Comcast is also competing with Walt Disney Co. in a bidding war for a big chunk of Fox assets, including Fox’s current 39% stake in Sky. Fox’s higher bid for Sky, disclosed early Wednesday, essentially bolsters Fox’s agreement to sell those assets to Disney.
Mr. Murdoch’s Fox launched its bid for all of Sky more than 18 months ago. In the year and half since, the deal has been embroiled in a long government review in the U.K., which was expected to draw to a close later this week. More recently, the pursuit morphed into one of the main flashpoints in a much larger corporate battle, pitting Disney against Comcast.
Both media giants have lobbed competing bids for many of the assets that now comprise Mr. Murdoch’s Fox. That includes its current 39% stake in Sky. Both Disney and Comcast view Sky as a way of expanding their media and distribution channels overseas.
Comcast has made its own, separate bid for all of Sky, offering GBP12.50 a share, a steep premium to Fox’s original bid of GBP10.75.
A Comcast representative couldn’t immediately be reached for comment Wednesday.
On Tuesday, Sky shares topped GBP15, reflecting expectations of a bidding war. The U.K. Takeover Panel, a regulatory body that polices corporate deal making, also had the power to require a better offer from Fox if it hadn’t eventually raised it on its own.
In some ways, the battle for Sky has become a proxy for the bigger media war between Disney and Comcast, for the wider portfolio of Fox assets. Fox first agreed to sell those assets to Disney for $52.4 billion in cash and stock. Comcast swooped in offering $56 billion in cash, prompting Disney’s latest cash and stock offer of $71.3 billion.
The Wall Street Journal reported late last month that Comcast is considering a range of options, including dropping its pursuit of Fox, offering a higher bid on its own or tapping partners to join the fray should bidding approach the $90 billion range.
Sky is one of the crown jewels of Mr. Murdoch’s media empire. It could help both Disney and Comcast — even without the other Fox assets — compete with new entrants like Netflix Inc. Sky produces its own content while its satellite and broadband offerings reach millions of European households. That combination — content and distribution — has driven years of consolidation in the U.S. Sky offers both Disney and Comcast a rare vehicle to boost that outside the country.
Fox is still awaiting final approval from London to pursue the deal — a green light many expect this week.
The government had been weighing for months whether Fox’s consolidation of Sky — which operates a popular news channel in the U.K. — would constitute an overconcentration of ownership among British news media. Mr. Murdoch and his family are major shareholders in 21st Century Fox as well as News Corp, which owns several large U.K. newspapers. News Corp also owns The Wall Street Journal.
The U.K. culture minister has indicated a separate deal by Fox to sell the Sky News operation to Disney, would be sufficient in preventing any overconcentration of ownership of media. The government was expected to make a final decision this week.
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