21st Century Fox in bid approach for Sky

[davieG]

This  could have gone in a few forums but....

 

US media giant 21st Century Fox has made a takeover approach for Sky that values the UK-based satellite broadcaster at £18.5bn.

The proposed offer is worth £10.75 a share in cash, a premium of 36% to the closing price on 8 December.

Sky shares ended 26.6% higher at 999.8p in London following the announcement.

Media tycoon Rupert Murdoch controls 21st Century Fox, which already owns a 39.1% stake in Sky.

Sky said that the independent directors of both companies had "reached agreement on an offer price" of £10.75 a share, but added that "certain material offer terms remain under discussion".

Fox said Sky's directors had indicated that they were willing to recommend the proposed offer.

According to Reuters' calculations, Fox would pay £11.25bn for the stake in Sky that it did not already own.

Sterling's 16% fall against the US dollar in the wake of the Brexit vote has made UK companies more attractive targets for foreign companies.

Fox is required to "clarify its intentions" by 6 January, or walk away for at least six months under UK takeover rules.

Alex DeGroote, analyst at Peel Hunt, said it was "not quite a done deal", but he would be surprised if it did not go ahead.

"Sky has not performed well in the UK stock market this year, and is seen as a Brexit loser. Fox is of course also a dollar bidder, and the collapse in sterling makes Sky a less expensive purchase than pre-Brexit," he said.

"There will also be cost synergies, which will reflect economies of scale in technology and content, such as sports and movie rights."

Image copyrightGETTY IMAGES

Image captionRupert Murdoch married Jerry Hall in March

Fox chief executive James Murdoch was named chairman of Sky this year, fuelling speculation that the US media company would make a bid.

Almost 30% of Sky shareholders voted against the appointment of James Murdoch as its chairman at the annual meeting in October, with some saying he was too closely linked to Fox.

Piers Hillier, chief investment officer of Royal London, which owns a 0.35% stake in Sky, said at the time: "Should Fox make a bid for Sky, investors need a strong independent chairman to protect the interests of minority shareholders and negotiate the best possible deal."

Rupert Murdoch has sought to take full control of Sky for many years.

In June 2010, his company, News Corporation - from which 21st Century Fox was subsequently split off - made a 700p-a-share offer that valued Sky at about £12bn. It was rejected by Sky's directors for undervaluing the company.

The bid was ultimately abandoned in mid-2011 in the wake of widespread opposition and the fallout from the phone hacking scandal that prompted the closure of the News of the World newspaper.

News Corp owns newspapers including the Sun, the Times and the Wall Street Journal, as well as other assets such as publisher Harper Collins.

In July 2014 BSkyB, as it was then known, paid almost £5bn to take over Rupert Murdoch's pay TV companies in Germany and Italy.

[AKCJ]

Murdoch can FOAD IMO.

[MPH]

So Murdoch will have total control over a major tv and online news source in the UK.

 

 

 

 

Fantastic.

Edited 9 December 2016 by MPH

[sdb]

So depressing. In every way. Football, especially in this country, is going too far now and mainly due to crazy TV deals. On a wider scale, this is just as bad. 

[GaelicFox]

The man who invented the Premier league , good for him hope it happens 

[davieG]

Rupert Murdoch's Sky bid challenged by Comcast

4 minutes ago

Y

US cable TV giant Comcast has made a £22.1bn bid for Sky, challenging an existing offer from 21st Century Fox.

Rupert Murdoch’s 21st Century Fox had already agreed an £18.5bn deal to buy the 61% of Sky it does not already own.

Comcast is the biggest US cable TV firm. It also owns the broadcast TV network NBC and Universal Pictures.

Comcast chief executive Brian Roberts called Sky "an outstanding company" and said he was "confident" the offer would be cleared by regulators.

Mr Roberts added: "We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares".

Comcast said its bid of £12.50 a share was 16% higher than the 21st Century Fox offer.

Sky's shares jumped more than 18% to above £13 in early trading on the London Stock Exchange.

 

What is Comcast?

Comcast is a US multinational media and telecommunications giant.

Its cable TV business is one of the largest in the US, and Comcast Cable also sells internet and phone services.

It owns NBCUniversal, which has news, entertainment and sports cable networks, as well as the Universal Pictures film giant.

 

Why does Comcast want to buy Sky?

Analysts from Liberum say there is "a strong rationale" for Comcast to buy Sky as it would give it immediate leading positions in pay-TV markets in the UK, Germany and Italy, as well as a presence in Spain.

Comcast already has NBC Universal film and TV assets, but the deal "would give it a very powerful distribution pan-European network," Liberum said.

Earlier this month, Sky won the lion's share of Premier League TV rights for the football seasons between 2019 and 2022.

Comcast chief financial officer Michael Cavanagh said the Premier League auction was a factor, but not the driving force behind the offer.

The Liberum analysts said the lower price for the Premier League TV rights contract has taken out the risks of price inflation.

What issues has 21st Century Fox had with its Sky bid?

Fox's Sky bid has not been viewed favourably by the UK's competition authority, which in January provisionally found that it would not be in the public interest.

The Competition and Markets Authority (CMA) is concerned that if the deal went through, the Murdoch Family Trust would have too much influence over public opinion and the political agenda.

However, Fox has been trying to mollify competition concerns.

Last week, Fox said it would keep Sky News running for at least 10 years, with a fully independent board for the channel, to try to make the proposed deal more attractive to regulators.

The CMA will send a final report to Culture Secretary Matt Hancock by 1 May, and he will then have 30 working days to make the final decision about whether the deal will go ahead.

 

Will the Comcast offer affect Disney's bid for Fox?

In December last year, Walt Disney agreed to buy the bulk of 21st Century Fox's business, including its 39% Sky stake.

Neil Wilson from ETX Capital said that after Comcast's own bid for Fox was rejected in favour of the Disney deal, there was every chance "Comcast would spoil Mickey's party".

"By making a play for Sky now it can get what it wants before Disney gets close - timing is everything and Comcast seems to have played its hand very well so far," he said.

Analysts at Liberum said that if Fox wanted to counterbid for Sky, it would "presumably need approval from Disney" to fund the bid.

If Disney refused, then Fox would have to find the money itself, "which means it is then looking at a loss if Disney did end up acquiring 100% of Sky".

Mr Roberts said Comcast was prepared to co-own Sky with either Fox or Disney, as long as Comcast held a majority stake.

However, Comcast has said it would like to own the whole of Sky.

 

How will regulators view the Comcast bid?

BBC media editor Amol Rajan says Comcast's bid looks unlikely to face the same regulatory hurdles as Fox's push for full control, "since media plurality, commitment to broadcasting standards, and the political heat around the name Murdoch do not arise".

In making its offer, Comcast said Sky News was "an invaluable part of the UK news landscape", and it intended to "maintain Sky News' existing brand and culture".

The Liberum analysts said there was a "very good chance" that Comcast's bid would succeed.

Neither Fox nor Disney will want to get into a bidding war, "especially given the [regulatory] complications surrounding Sky News", they said.

The UK government may also be looking for a way to defuse the political risks from the Fox bid, they added.

[martyn]

On 09/12/2016 at 12:42, AKCJ said:

Murdoch can FOAD IMO.

Is that you Jerry?

[AjcW]

Not a great deal of difference between Fox and Comcast to be honest.... they're even in bed with each other on a few things (Hulu listed above, NBCUniversal(owned by Comcast) own 30%, Fox the rest)

 

If Comcast buy Sky they'd probably end up with the biggest global share of Football rights with NBC Sports Network in the Americas and Sky here. 

 

Can't see Murdoch ever letting go of Sky though. And I highly doubt Disney will buy Fox if they let go of Sky! 

 

Disney own ESPN so would be interesting if BT got to keep hold of their ESPN rights if Disney bought Fox & Sky. 

[Alf Bentley]

It occurred to me recently that @21st Century Fox hadn't posted much recently. Been a bit busy with global media takeovers, it seems.

 

It also looks as if he joined FoxesTalk in January 2011....a couple of years before the media mega-business was formed, according to Wiki.

 

Did you copyright your user name, mate? If you did, you could probably sue them for millions for breach of copyright. 

[jammie82uk]

Shouldn’t this be in general chat? Come on @davieG you should know better 

[davieG]

6 minutes ago, jammie82uk said:

Shouldn’t this be in general chat? Come on @davieG you should know better 

Maybe but as Sky are the main broadcasters of PL games perhaps General Sport or maybe because LCFC play in the PL it should be where it is?

 

Who knows?

[Foxxed]

Okay, they have a bad reputation. But that doesn't mean they'll continue like that.

 

Giving them the Premier League rights could be the perfect chance to turn over a new leaf!

 

Right, I'm off to give my credit card details to a known thief. Be right back.

[Alf Bentley]

37 minutes ago, davieG said:

Maybe but as Sky are the main broadcasters of PL games perhaps General Sport or maybe because LCFC play in the PL it should be where it is?

 

Who knows?

 

Anarchy from Davie G, it's coming some time maybe, he posts in the wrong place, then stares in your face

I thought it was the FT, not just another Bentley's Roof tenancy-aaaggghhh!

 

[davieG]

I thought of this

 

Then I thought