Comcast bid for Sky adds to tangled telecoms web
- Author: Wendy Palmer Mar 02, 2018,
Mar 02, 2018, 1:17
Comcast chief Brian Roberts said Tuesday that the company is confident its cash offer for Sky will pass muster with regulators, avoiding the issues that have beset 21st Century Fox's attempt to buy the 61% of Sky it does not own. Regulatory concerns regarding media ownership have also been raised regarding combining Murdoch's News Corp media giant with Europe's largest pay-TV broadcaster. Sky shares jumped by a fifth on Tuesday morning and now trade nearly 7 percent above Comcast's bid.
"We'd prefer 100 percent but it's not a condition", Roberts said on a conference call.
In a brief response, Sky advised shareholders to take no action in the absence of a formal bid.
Comcast's bid is £12.50, or about $17.46, per share, which it says implied an equity value of $31billion for Sky.
We note that no firm offer has been made by Comcast at this point.
Analysts eyed even higher offers.
Present in 23 million homes across Europe and known for its technological innovation, Britain's Sky has already agreed to be sold to Murdoch's 21st Century Fox (FOXA.O) but the takeover has been delayed by concerns over the media tycoon's influence in Britain.
'Alongside an unchanged 110p final dividend, this takes Persimmon's total dividend payout to 235p per share, which equates to a whopping 8.5% yield, the best the FTSE 100 now has to offer income-seekers'. Including debt, the deal is worth $66.1 billion.
Liberum Capital analyst Ian Whittaker said in a first reaction: "We expect this deal to go through as we do not think Fox (or Disney, who are acquiring the Sky assets as part of their purchase of various Fox assets) will want to get into a bidding war, especially given the complications surrounding Sky News".
The group, which has a broadband arm serving 29 million USA customers, said worldwide revenues would climb from 9% to 25% if the deal goes ahead.
"This is a great asset, and it has been for several decades", he added during a morning conference call with US investors.
Comcast would maintain Sky's United Kingdom headquarters and use its entertainment, distribution, and technology to help it "more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape", he said.
Roberts said Comcast would use Sky to further expand its European presence, reports the Financial Times. Meanwhile Sky's shares jumped more than 18% to above £13 in early trading on the London Stock Exchange.
"Comcast must demonstrate its commitment to plurality by guaranteeing a properly funded Sky News for at least a decade as a key condition of the sale". Fox's shareholding in Sky is one of a number of assets it ultimately hoped to flog to Disney.
If successful, Comcast said it "intends to maintain Sky News' existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards".
Sky secures rights to show 128 English Premier League soccer matches for three seasons from 2019/20 for 3.58 billion pounds, much lower than expected, boosting its shares and future earnings.