US media giant Comcast mounts £22.1 billion takeover swoop for Sky
NBC and Universal Pictures owner Comcast has made a £22.1 billion takeover approach for Sky in an attempt to trump 21st Century Fox's efforts to seize full control of the UK broadcaster.
The US media giant behind cable channels MSNBC and CNBC is eyeing a possible cash offer of £12.50 per share, a 16 per cent hike on Fox's bid of £10.75 a share.
The group wants to snap up a majority stake in the Game Of Thrones broadcaster - more than 50 per cent - and was confident a deal would be given the green light by regulators.
Such a move would place Sky at the centre of a full-blown takeover tussle, with Rupert Murdoch's Fox struggling to buy the 61 per cent of the broadcaster it does not already own due to mounting regulatory hurdles.
Comcast said its offer would be a 13 per cent premium of Sky's closing share price of £11.05 on Monday.
Comcast chairman and chief executive Brian Roberts said Sky is "an outstanding company".
He said: "We think that Sky would be very valuable to us as we look to expand our presence internationally.
"The superior cash proposal values each Sky share at £12.50 in cash - a significant premium to the 21CF price currently recommended.
"We would like to own the whole of Sky and we will be looking to acquire over 50 per cent of the Sky shares. We are confident that we will be able to receive the necessary regulatory approvals. If successful, the acquisition will enhance our free cashflow per share in the first year.
"The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe.
"We intend to maintain and enhance Sky's business."
Shares in Sky surged more than 18 per cent in morning trading on the London Stock Exchange following the announcement.
Comcast, which has a broadband arm serving 29 million US customers, said international revenues would surge by between 9 per cent and 25 per cent if the deal goes ahead.
It also pledged to ensure the future of Sky News, a flashpoint in Fox's £11.7 billion takeover bid because of regulatory concerns over Mr Murdoch's dominance over UK media.
While Comcast has a "substantial" UK operation employing 1,300 staff, the company believes its approach will not spark concerns over media plurality because of its "minimal presence" in UK media.
A potential takeover battle between Comcast and 21st Century Fox also has the potential to complicate Walt Disney's 66 billion US dollar (£47 billion) attempt to buy Fox's entertainment assets, including Sky.
Mr Roberts added: "We hold the management of Sky in high regard and would welcome the opportunity to meet with them and the independent directors of Sky to discuss our plans for the business, particularly with respect to maintaining Sky's strong platform in the UK.
"In due course, we very much hope that the independent directors will recommend our proposal."
The Comcast move comes after the UK competition watchdog found Fox's deal to buy Sky was "not in the public interest".
The Competition and Markets Authority had suggested ways Fox could address its concerns, including spinning off Sky News, or "behavioural" changes to protect Sky News from direct influence from the Murdoch Family Trust.
Fox has offered to shield Sky News from Mr Murdoch's influence and guarantee the existence of the news service for at least 10 years as part of a series of so-called "firewall remedies".
The CMA has until May 1 before sending its final report on the Fox bid to Culture Secretary Matt Hancock, who will then have 30 working days to make a final decision.