How must it feel to own an asset that three of the biggest media companies in the world want to get their hands on? Sky’s (SKY) investors can answer that question. The group’s shares leapt by a fifth after US cable giant Comcast (US:CMCSA) waded into the takeover battle with a bid to trump that made by 21st Century Fox (US:FOXA). In fact, the prospect of a bidding war between the two US groups and Walt Disney (US:DIS) – which has made a separate bid for Fox’s media assets – sent Sky’s shares higher than the 1,250p cash offer from Comcast.
The Sky saga has become an epic worthy of any of its pursuers' films. It all began in December 2016 when Fox – a branch of the Murdoch family media empire – made a bid for the 61 per cent of Sky that it did not already own. That deal has been entangled in the UK regulatory process due to concerns that full control of Sky would give Rupert Murdoch – who also owns the Times and The Sun newspapers – too much influence over British media.
Meanwhile, Fox has received a takeover bid of its own. In late 2017, Walt Disney offered $66bn (£47bn) for its media assets, including its current share of Sky. If both deals were to get the green light from competition regulators, Sky would ultimately end up under the control of Disney, whose chief executive described it as a “crown jewel”.
Enter Comcast: telecoms company, cable TV giant and owner of Universal Studios; previous pursuer of Disney (in 2004) and Fox (in 2017); and victim of the rising demand for rival TV companies Amazon (US:AMZN) and Netflix (US:NFLX). Through Sky, the group is looking to expand its geographic reach and enhance its content library to offset the dwindling demand for its services amid the fierce competition in the US TV market. Its offer values the whole of Sky at £22.1bn, compared with the £18.5bn Fox was prepared to pay. Chief executive Brian Roberts said he would like to own all of Sky, but his group’s offer is not dependent on Fox selling its existing stake.
