The long-running takeover battle for satellite broadcaster turned broadband and mobile provider Sky plc took another twist this morning when US cable giant Comcast tabled a £22.1 billion bid for the company.
The bid comes as Sky had looked like it was going to fall to Rupert Murdoch's 21st Century Fox, which itself is undergoing a $52 billion merger with Walt Disney Company.
The offer will almost certainly lead to an all-out bidding war for the company.
Although 21st Century Fox remains in the driving seat with its existing 39.1 per cent minority shareholding dominating the company. The next biggest shareholder is investment firm UBS with a stake of just over six per cent.
However, Comcast's bid is well above 21st Century Fox's bid, which values the company at £18.5 billion, and which shareholders had claimed undervalued it.
The offer for Sky from 21st Century Fox was made in December 2016, but has been held up by the Competition and Markets Authority. An earlier bid from Rupert Murdoch's News Corporation, since subsumed into 21st Century Fox, launched in June 2010, but withdrawn in July 2011 as the voice-mail hacking scandal at The Sun and News of the World newspapers blew up.
Comcast is the biggest cable TV company in the US and also owns TV network NBC and film studio Universal Pictures. It is unlikely to face the same kind of regulatory hurdles that have been put up against Sky, which have partly been political, based on the figurehead of Rupert Murdoch.
In 2014, Sky acquired various 21st Century Fox European media assets - Fox's 57.4 per cent stake in Sky Deutschland and its 100 per cent stake in Sky Italia - for £4.9 billion. Sky now has outright control of both companies, making it a pan-European broadcaster.
Unveiling the bid (PDF), Comcast CEO Brian Roberts described Sky as "an outstanding company" delivering "a fantastic viewing experience", which was a "consistent innovator".
He continued: "It has great people and a very strong and capable management team… Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky's UK headquarters."
He added that Sky would increase Comcast's international revenues from nine per cent to 25 per cent of the company's revenues.
Analysts were quick off the mark with comment, pointing out that US cable operators have been looking for acquisition targets overseas before the era of cheap money recedes.
"This puts a real spanner in the works. We've always said that Comcast has been sniffing around Europe. The bid offers plentiful opportunities for growth beyond the US and we've yet to see the same level of consolidation seen in this market," said Paolo Pescatore, vice president of multiplay and Media at CCS Insight.
He continued: "It is unsurprising that there is significant interest in Sky as it owns a wealth of content and has done a great job of moving into IP [intellectual property] distribution. We strongly expect to see a bidding war for Sky. It has all the assets to compete with the web giants."
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