Sky pulls support for Murdoch bid as Comcast confirms offer

Sean Reid
April 25, 2018

The offer is at a 16 percent premium to Fox's 10.75 pound-per-share bid for Sky.

Fox first announced its 10.75 pound per share offer in December 2016 but the deal has been held up concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well a clutch of United Kingdom newspapers.

Comcast said it was "delighted" to be formalizing its bid for Sky, for which it had secured a bridge loan of up to 16 billion pounds and a term loan credit agreement of up to 7 billion pounds.

Comcast, which owns TV networks such as E! and NBC, as well as Universal Pictures, first announced plans to make a bid in February.

But the United Kingdom competition watchdog has raised a host of concerns over the Fox acquisition, while since then, Walt Disney has also agreed to snap up a raft of Fox assets including the Sky 39% stake.

Sky shares rose 4 per cent to £13.61 on expectations of a counter offer.

Investors, who think the bidding war will continue, sent Sky's stock much higher than Comcast's new offer. However, there's no certainty that Comcast will be able to pull off the offer.

Comcast also said it would establish an independent board for Sky News as a bulwark against editorial interference, which has been a major concern for politicians and regulators in the Murdoch pursuit of Sky. When the deal was announced, 21st Century Fox said it remained "committed to completing its proposed acquisition of the shares in Sky it does not own". It also proposed to protect media plurality in the United Kingdom by giving a binding post-offer undertaking not to acquire any majority interest in any British newspapers for five years.

"We have long believed Sky is an outstanding company and a great fit with Comcast", Chief Executive Brian Roberts said in a statement.

The interloper also sought to tackle the concerns over the future of Sky News that have dogged the Fox bid. "Sky will be our platform for growth across Europe".

In response, Sky's independent directors said they would withdraw their recommendation that shareholders accept the Fox offer.

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