21st Century Fox

Comcast tops Fox with $38.8 billion offer for Sky

The battle for ownership of British broadcaster Sky ended on Saturday with Comcast outbidding 21st Century Fox with a $38.8 billion bid through a U.K. auction. Comcast’s offer of about £17.28 per share beat Fox’s highest bid of £15.67 in a three round bidding battle that began on Friday. The results were announced by The Takeover Panel. Following the auction 21st Century Fox, which owns 39% of Sky, said they are “considering options” regarding their share. “We note the increased cash offer for the fully diluted share capital of Sky by Comcast, and that it has been recommended by the Independent Committee of Sky,” 21st Century Fox said in a statement. “Sky is a remarkable story and we are proud to have played such a significant role in building the incredible value reflected today in Comcast’s offer.” It is unusual for an auction to be used for a corporate deal and is rare for settling a takeover of a public company the size of Sky, which has a market capitalization of more than $35 billion. The auction pitted Rupert Murdoch’s 21st Century Fox, which owns 39% of Sky, against Comcast and CEO Brian Roberts. The Walt Disney company is buying Fox’s entertainment assets for $71 billion. 21st Century Fox is the parent company of FOX Business and Fox News.

Comcast bids $65 billion for 21st Century Fox assets, topping Disney

Comcast announced a $65 billion bid for Twenty-First Century Fox units that are currently in an agreement to be acquired by Disney. The bid, announced Wednesday, represents a 19 percent premium to Disney’s offer. Comcast, the parent of CNBC, offered $35 a share in cash. Disney agreed in December to buy the majority of Fox for $52.4 billion in stock. The deal included Fox’s movie studios, networks National Geographic and FX, Star TV, and stakes in Sky, Endemol Shine Group and Hulu, as well as regional sports networks. The assets would increase Comcast’s international footprint and boost its entertainment portfolio at a time when it’s facing pressure in its video business as more consumers cut the cord and turn to internet-delivered video services like Netflix. “These are highly strategic and complementary businesses, and we are in our minds the right buyer,” Comcast’s CEO Brian Roberts said on a call with investors. In a letter to Fox’s board and members of the Murdoch family released earlier, Roberts said, “We were disappointed when [Fox] decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price.” He went on to say, “We are pleased to present a new, all-cash proposal that fully addresses the Board’s stated concerns with our prior proposal.” Comcast is planning for an increased bid from Disney that may include a cash component, according to people familiar with the matter. Comcast believes it is better suited to offer cash because the market allows for a higher leverage ratio from a cable company with strong cash flows than a media company like Disney, which is accustomed to carrying lower leverage ratios, the people said. A Disney bid with cash will also diminish the tax benefits for the Murdoch family, which controls Fox. The long-awaited bid comes a day after a federal judge cleared AT&T’s $85 billion takeover of Time Warner, a deal the government had tried to block on competition grounds. AT&T’s win in the court case is expected to usher in a wave of big mergers as companies look for new ways to combine. Comcast feels confident of its chances to get a deal passed by U.S. regulators after AT&T’s deal was approved yesterday, according to people familiar with the matter. Comcast is willing to divest Fox’s regional sports networks and even Fox’s portion of Hulu, if necessary, the people said. While Comcast would like to keep the Fox stake in Hulu if possible, and thinks it should be able to, it would consider dropping down closer to 50 percent if necessary, one of the people said. Comcast, Fox and Disney all own 30 percent of Hulu. Time Warner owns the other 10 percent. Asked about Hulu on the investor call, NBCUniversal CEO Steve Burke said, “We think that’s a very important part of this deal,” adding that Comcast would be interested in investing in and growing the streaming service in the future. Comcast also pledged to offer the same $2.5 billion reverse termination fee Disney already agreed to and has offered to reimburse the $1.525 billion break-up fee that Disney would have to pay if it doesn’t complete its deal. In the media world, cable and telecommunications giants like Comcast are looking to add capabilities in creating the content they distribute across their networks. Viacom and CBS have also been dancing around a deal that would marry cable networks and the Paramount Pictures film studio with CBS’s networks and local television stations.