Comcast Make A Surprise Move For Sky – Outbidding Disney
With Disney’s purchase of 21st Century Fox currently going through its negotiations, a small £22.1 billion bid by Comcast for Fox’s 39% stake of Sky, might throw a spanner in the wrench.
This was a surprise bid by Comcast and Fox have been very vocal about preferring to do business with Disney, because they believe it will go through easier than Comcast. So Comcast look to be trying to break up the deal in smaller parts.
Here are the official details:
Comcast Corporation (Nasdaq:CMCSA) today published a Rule 2.4 announcement (under the City Code On Takeovers And Mergers (the “Code”)) regarding a possible offer which is a superior cash proposal to acquire Sky. Sky is a leading consumer entertainment company in Europe, providing exceptional entertainment and communications services primarily in the UK, Germany, and Italy.
Comcast’s announcement of a superior cash proposal of £12.50 per share represents a 16% increase in value over the existing 21st Century Fox offer for Sky. Comcast’s superior cash proposal implies an equity value of $31bn (£22bn) for Sky.
A combination would bring attractive financial benefits to Comcast shareholders, and is expected to be accretive to Comcast’s free cash flow per share in year one.
“We think Sky is an outstanding company. It has 23 million customers and leading positions in the UK, Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team,” said Brian L. Roberts, Chairman and CEO of Comcast Corporation.
Roberts added, “Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky’s UK headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of Company revenues.”
The acquisition would enhance the entertainment, distribution, and technology leadership of Comcast, and importantly expand Comcast’s international footprint to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape. The combined business would create compelling opportunities for growth and innovation.
It will be interesting to see if Fox and Disney respond to this offer later today. And if this bid by Comcast does get agreed, how will it effect the overall deal between Disney and Fox?