Comcast secures victory over Fox to buy Sky for £30.6bn
In a conclusion to the heated corporate bidding war that lasted almost two years, US cable television provider Comcast outbid 21st Century Fox last night with a total offer of £30.6bn for control of broadcasting giant Sky.
The final offer came in at £17.28 per share from Comcast after three rounds of bidding in the UK's largest ever auction process by deal size, beating out Fox's offer of £15.67 per share.
The deal makes Comcast the world's largest paid-for TV operator with roughly 52m customers. This growth is expected to continue, as Comcast seeks to utilise Sky for expansion into on-demand services in competition with platforms such as Netflix.
Rupert Murdoch's Fox, which is soon to be owned by Disney in a separate takeover, added in a statement issued this morning that it is now "considering its options" for the 39 per cent of Sky it already owns.
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Comcast's chief executive and chairman Brian L. Roberts said the news was "a great day for Comcast", and added the deal is expected to be completed before the end of October this year.
Sky's own board of independent directors swiftly recommended the Comcast offer to its shareholders as the auction closed, calling the result an "excellent outcome" for investors at a multiple of 15.5 times Sky's adjusted earnings before interest, tax, depreciation and amortisation for the financial year ending in June 2018.
Last night's auction round saw Comcast's bid jump 17 per cent from its previous offer of £14.75 per share, after Sky's share price rose to £15.85 as markets closed on Friday.
The final offer of £17.28 was more than 125 per cent higher than Sky's share price in December 2016 just before the takeover process began, and 61 per cent higher than Fox's original £10.75 per share offer.
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Comcast will need to secure a stake of just over 50 per cent in Sky in order to retain controlling ownership, with its high bidding price destined to ensure enough investors will rush to sell their shares to Comcast at a hefty premium.
One Sky investor told Reuters the question remains whether Fox will decide to sell its shareholding in Sky, which Comcast values at $15bn (£11.5bn), or "if not, can Comcast get to 50 per cent".
Comcast has said it also plans to buy Sky shares on the market.
Sky's group chief executive Jeremy Darroch said the deal is "the beginning of the next exciting chapter for Sky".
However it is a bitter end for Murdoch, who first launched a £8bn takeover bid for Sky in 2011 before abandoning those plans while he handled public scandals at News Corporation.