The cable giant is complicating Rupert Murdoch’s plan to sell his entertainment assets to Disney. Now Fox must enter a bidding war for Sky or rethink its Disney deal.
Comcast boss Brian Roberts is driving a wedge between Walt Disney and 21st Century Fox. The United States cable company’s 22 billion pound ($31 billion) offer for Sky, the British pay-television group, leaves Rupert Murdoch, Fox’s chairman, with two unappealing options: enter a bidding war for Sky, or rethink his deal to sell Fox’s entertainment assets to Disney.
Sky’s investors owe a big thank you to a store employee near the group’s London head office. Mr. Roberts’ interest in the broadcaster firmed up after an hourlong demonstration of its flagship Sky Q TV product during a trip at the end of last year. Comcast is offering £12.50 a share in cash for Sky, comfortably beating Fox’s bid of £10.75 per share for the 61 percent of the company it does not own.
Comcast’s slim operations in Britain mean the bid should raise few competition concerns. 21 Century Fox, by contrast, has been told by regulators that its bid risked giving the Murdoch clan too much influence over Britain’s news agenda. It’s now waiting for the publication of a final report that will detail regulators’ recommended remedies, such as a separate editorial board for Sky News. Media Secretary Matt Hancock will have the final say in the summer.
Comcast reckons its expertise funneling television shows, sports and movies directly to homes makes it a better owner for Sky. How the $183 billion group’s own shareholders will benefit is unclear: Comcast’s offer contains lots of detail about supporting creative industries and young people in Britain, but little about financial returns. That may be because Mr. Roberts’s real objective is to upset a $52 billion all-stock tie-up that Disney and Fox announced in December. Comcast still covets Fox’s assets, Reuters reported earlier this month. Bob Iger, Disney’s chief executive, has described Sky as Fox’s “crown jewel.”
Comcast’s offer will go ahead if just over 50 percent of Sky shareholders accept it. That means Fox’s 39 percent stake will not be enough to block the deal. Mr. Murdoch, therefore, has two options: revise the terms of the Disney sale to exclude Sky, or enter into a bidding war with Mr. Roberts. Sky shares jumped by a fifth on Tuesday morning and now trade almost 7 percent above Comcast’s bid. Investors have placed their bets.
