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Comcast Corp. (CMCSA) rebounded modestly on Tuesday after the group announced it had acquired about 30% of the outstanding shares of UK-based Sky Plc. (SKYAY) since he's won the right to buy the broadcaster in a three-round auction that beat his rivals Walt Disney Co. (DIS) and 21st Century Fox (FOXA) but raised investor concern about the price of $ 40 billion.
Comcast, which has until October 11 to convince Sky shareholders to accept its winning bid of £ 17.28 per share, which has exceeded the £ 15.67 Disney / Fox bid and valued the group at 30.6 billion pounds ($ 40.2 billion). Tuesday announced that it has purchased just under 516 million Sky shares in the open market, taking 30% and triggering a mandatory transaction to buy at least 50%, plus one share, of the London-based broadcaster.
Comcast shares recorded an increase of about 1% in pre-market transactions, following a 6% decline on Monday, indicating an opening price of $ 35.98 each. Sky's shares rose about 0.4% late in the morning in London and changed hands at Comcast's bid price of GBP 17.28 each, extending their gain since the beginning of the year. year to 72.4% and some 80% since the first approach of the Fox. buy the entire broadcaster in December 2016.
However, with Disney holding a 39% stake in Sky following its $ 71.3 billion takeover by Fox, and activist shareholders such as Elliot Management who can just keep their investments, Comcast could still exceed the 50% threshold before 11 October. expiry date and could be stuck between paying a high price for Sky, but not having full control over the largest pay TV broadcaster in Europe, despite a resounding support from the part of the target.
"It is in the interest of all Sky shareholders to accept the Comcast offer," Sky said Monday. "As a result, Sky's Independent Committee unanimously recommends that Sky's shareholders accept the offer (Comcast) and, in order to secure the closing of the transaction and the possibility of a shareholders to accept immediately. "
Several options are now on the table for the Disney / Fox stake, which is valued at around $ 15.7 billion on the basis of Comcast's $ 40.2 billion mandatory offer.
Disney also has the opportunity to retain its stake even though Comcast prevails, a tactic that would allow it to wait for changes in the global streaming and media landscape, especially after the release of the UK next year and confidentiality of data and media hegemony in London and Brussels. It could also opt for its stake in Comcast's 30% stake in Disney's 60% -owned Hulu streaming service provider, or sell its stake in Sky and use the proceeds of $ 15.7 billion to reduce the debt. he bought Fox's media assets from Rupert Murdoch earlier this year.
The Action Alerts Plus team, however, argued that the options available would be detrimental to the fact that Comcast won a big victory by beating its rival for a European asset essential to its expansion abroad.
"Although the win-win scenario has not been played out immediately, we still think it will be the case … we believe that the shares should be gradually repurchased as the company is now on the verge of acquiring an asset" team said Monday. "It's not a short-term decision – Roberts has done this business to become a major player in the US and abroad, and as a long-term shareholder, we appreciate this deal."
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