Business

Murdoch's Fox increases Sky bid to £24.5bn in takeover battle


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Rupert Murdoch’s 21st Century Fox has increased its offer for UK broadcaster Sky to £24.5bn, topping a previous offer from rival bidder Comcast.

US media giant Comcast made a £22bn offer for Sky in February, trumping a previous offer from Fox, which valued Sky at £18.5bn.

Fox is expecting to get regulatory approval from Britain this week for the deal.

Fox said Sky’s independent committee had agreed the deal.

What have been the stumbling blocks for Fox’s Sky deal?

Rupert Murdoch’s Fox has been trying to get approval from UK regulators since 2016 to buy the 61% of Sky it does not own already.

The bid was held up by fears that it could give Mr Murdoch too much power over UK media.

Fox has been trying to address those concerns through concessions, including selling Sky News to Disney once the deal is complete.

In June, the then Culture Secretary, Matt Hancock, said the Fox deal could go ahead if it sold Sky News, with certain provisos.

At the time, Mr Hancock said he needed to be confident that the deal ensured the long-term financial viability of the channel.

Sky News would need to continue to be a major UK-based news broadcaster. It would also need to be able to make editorial decisions independent from the control of the Murdochs.

Mr Hancock said in June that there would be no public interest concerns with a Comcast takeover of Sky.


How do Sky shareholders feel?

Analysis: BBC business editor Simon Jack

There is nothing better for an owner than watching an auction between two rich buyers who really want what you are selling.

That is how Sky shareholders feel as Murdoch-controlled 21st Century Fox raised the bidding once again for Sky.

The new bid is a whopping 80% more than the market thought Sky was worth before the bidding war started.

A source close to the deal said: “It’s absolutely unbelievable – they are way overpaying.”

And I’m told it’s not done yet. “I think Comcast want it more – and will be back.”

This is sweet music to the 61% of Sky shareholders who aren’t part of the Murdoch family and they will be happy with the independent directors on the Sky board.

The big question may be for Disney, which, if the price goes any higher, may start to think that the company they want to buy – Fox – is overpaying for Sky – which in turn means they are getting a worse deal.

As one source at Sky told me: “If you can figure out what the strategy is here, then let me know.”


Is there also a battle for Fox?

Yes. Separately, Disney wants to buy Fox’s entertainment assets, including its stake in Sky.

In June, Disney increased its offer for 21st Century Fox to $71.3bn (£54bn) in cash and shares, up from an earlier $52bn offer.

Comcast also wants to buy Fox. The US media conglomerate is locked in a battle with Disney over Fox’s entertainment assets, which include movie studios, cable channels, National Geographic and a 30% stake in video website Hulu, as well as Indian network Star.

Fox would keep hold of some successful assets, including Fox Sports, Fox News and Fox Television Stations, and make them into a new company called “New Fox”.



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