Comcast beats its long-term rival Twenty-First Century Fox in an auction to purchase British Broadcaster Sky, valued at $39 billion. In the rare auction held by British regulators, the U.S. based cable giant offered £17.28 ($22.59) share which surpassed Fox’s offer of £15.67 (over $20) after three rounds of bidding.
The bidding battle between two of America’s largest media companies over the coveted overseas competitor lasted for a long period, where Comcast raised its share by 40.1% from the initial bid of £12.50 in February. Fox held a share bid of £10.75 in December 2016 and has gone back and forth with Comcast by raising its bid for the Sky several times.
According to CNBC report, takeover auctions are normally reserved for commercial transactions where bidders submit sealed offers to a third-party arbiter and protracted blind auction format is unusual for a deal as observed as the Sky acquisition.
Another source reveals that it expects Comcast to initiate talks regarding Disney selling its Sky stake to Comcast. Further, the source adds, Disney could also sell its stake in Hulu, one of the America’s online entertainment services.
Brian L. Roberts, chairman and chief executive officer of Comcast, had earlier mentioned British Broadcaster Sky as a ‘Unique asset’ and applauded the decision of its acquisition. Roberts said, the acquisition will allow Comcast to increase its customer base in quick, efficient, and meaningful way while expanding internationally. Comcast encouraged the Sky shareholders to accept their offer and complete the process by the end of October 2018.
The one-day bidding process of Sky acquisition involved three rounds where bids in first and second round were relatively very low, a source told CNBC. Fox, which is bought by Disney, called Sky as ‘Crown Jewel’ for Fox’s television and movie asset which later refused to comment on outcome of the bidding process.
Sky produces its own news, sports, and entertainment programming, and sells TV, phone, and internet services to over 20 million European customers. As the new owner won’t be confirmed until Sky shareholders accept the offer, the U.K. broadcaster recommends to accept it by October 11. It further mentions that the price offered by Comcast is ‘materially superior’ and would be in the best interest of all shareholders.