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Comcast's bid of £ 17.28 per share, or about $ 22.59 per share, topped the highest bid of $ 15.67 after three rounds of bidding on Saturday, when of a rare auction by British regulators. Such a process in the UK, which has led a handful of smaller-scale auctions to settle intractable bidding wars. The winning bid is a bonus or more than twice the value of Sky before Rupert Murdoch's Fox put Sky on the line 21 months ago.
Comcast won at a high price. Its winning bid was £ 17.28 per share, up sharply from its £ 12.50 bid in February and Fox's initial offer of £ 10.75 in December 2016.
The bombing of Sky – which sells telephony, television and Internet services to 23 million European customers and produces its own information, entertainment and sports programs – is part of a series of media campaigns aimed at as
Netflix
Inc.
Comcast executives claim that a combination with Sky, which in itself is a content and distribution giant, will bring its number of users to 53 million and will allow more investment in technology, programming and sports rights. The merger will also help Comcast diversify its revenue base beyond the United States, where cable cuts have an impact on the traditional television sector.
"We think [Sky is] more like Comcast NBCUniversal than any other company we've seen, "Comcast's chief executive, Brian Roberts, said in February when the deal was announced.
Still, Sky was kind of a consolation for the cable giant. This summer he lost a bidding war for
Walt Disney
Co. for entertainment assets of Fox. Disney has agreed to pay $ 71 billion for Fox's famous Hollywood studio and its international assets, including a 39% stake in Sky that Fox had held for a long time. This agreement should be concluded in the coming months.
If Fox had won Sky's bid for this weekend, Disney would eventually have taken full control of the pay-TV company. Instead, one will now wonder if Disney will sell the 39% stake in Sky – its value has risen through auction competition – or will remain a minority partner for Comcast.
Analysts have suggested that Comcast could switch its 30% stake in Hulu to Disney – giving Disney overwhelming control of the streaming video service – in exchange for the rest of Sky. Comcast stated that he valued his position at Hulu and that he had just named NBCUniversal executives to Hulu's board.
Mr. Roberts, of Comcast, said that he would be willing to jointly own Sky with a rival. Mr. Murdoch and his family are the main shareholders of Fox and the Wall Street Journal, the parent company of News Corp.
Fox launched Sky's lawsuit in December 2016, offering £ 10.75 per share. The deal experienced regulatory and political delays, and Comcast in February made a surprise offer of £ 12.50 per share. Fox raised its bid to £ 14 per share in July, but Comcast countered with £ 14.75 per share later in the day. The UK takeover panel held the weekend auction after neither party withdrew.
Comcast executives said the acquisition of Sky would facilitate the company's ability to counter Netflix, potentially with an international streaming service. Sky already operates a streaming service called NOW TV in several European countries and has invested in quality original programming in response to Netflix expenses.
The merger could also bring benefits in news and entertainment programming. Sky News and NBC News could share resources and a larger scale could help the company negotiate the best content deals.
This is particularly true in the field of sports, where technology companies with strong
Amazon.com
Inc.
and
Alphabet
Inc.
Google throws his hats on the ring. NBC has rights to the Olympics, NFL games, NASCAR and the Premier League, while Sky offers matches from major European football leagues.
Investors have not been as positive about Sky's pursuit. "The investors in Comcast and Disney are hoping their business will not lose," said Craig Moffett, cable analyst at MoffettNathanson, before the weekend auction. . "
Comcast investors worry that the company is buying a satellite broadcaster at a time when US companies like DirecTV and
Dish Network
Corp.
have hemorrhagic clients under competitive pressure. Investors also feared that Comcast's pursuit of Sky and the failure of Fox's entertainment assets offer shows that management has no confidence in Comcast's core business.
Comcast shares fell sharply after announcing their initial Sky offering in February, but rebounded more recently and are 4.5% lower than their February price. The company uses debt to finance its offer entirely in cash.
Roberts tried to quell Wall Street's concerns, noting that Sky is not just a satellite TV company – it also offers a broadband offering, a content studio and has invested heavily in video technology. In June, Sky posted good results, including customer additions up 39% over the quarter. He also said that Comcast was confident in the strength of its main cable business in the United States.
"At the moment, I think we are in a strategic location and that all the transactions we are doing are trying to offend us, because we believe that in the long run we can create exceptional shareholder value," he said. said Mr. Roberts. recent investor conference Goldman Sachs.
Write to Stu Woo at [email protected] and Shalini Ramachandran at [email protected]
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