21st Century Fox/Comcast/Sky

UPDATED with statement from Fox:

Sending the ball back across the net, Comcast said it was upping its offer for European pay-TV giant Sky, just hours after 21st Century Fox boosted its own bid.

Comcast put forward its new proposal at an implied value of $34 billion, or £26 billion at £14.75 per share.

“Comcast has long admired Sky and believes it is an outstanding company and a great fit with Comcast,” the company said. “Todays announcement further underscores Comcasts belief and its commitment to owning Sky.”

Fox issued a terse, one-sentence statement this evening acknowledging the Philadelphia-based companys bid, which topped its own $32.5 billion offer earlier in the day.

The move escalates a bidding war thats playing out across continents. Comcast is said to be preparing a counter-attack in its long-running fight with Disney over Foxs studio and network assets, though many analysts have increasingly argued that it is an either-or scenario.

Some interpret the Sky offer as as a signal that Comcast is walking away from its bidding war with Disney over Foxs film and television assets and focusing instead on an asset that would extend its reach in Europe.

For Sky, the giant satellite provider, Comcast said it has committed financing available to satisfy the full cash consideration payable to Sky shareholders. It noted that it has already received relevant regulatory approvals in the EU, Austria, Germany, Italy, and Jersey. Comcast expects to complete the acquisition before the end of October 2018.

Just a couple of hours before the latest offer came through, RBC Capital Markets analyst Steven Cahall issued a research report titled “The Final Countdown?” In it, he looked at the two mega-deals in the final stages of bidding — Sky as well as the Fox assets.

“We could be seeing a bidding prioritization by Comcast for Sky over Fox, perhaps due to the fact that Comcast cannot afford both, and has to choose its battles,” Cahall wrote. “The markets collective wisdom appears to be pricing in a cool down in the bidding war for Fox with Disney and Comcast each rallying today, with Fox down 4%.”

The latest bid from Comcast is “doable” in terms of leverage, Cahall said. On a June 20 conference call with Wall Street analysts, Disney provided leverage projections both with and without a successful Sky acquisition. “This has left some investors wondering if it indicates some willingness to back-off of a Sky bid,” Cahall wrote, especially given the companys incremental investment in its long-awaited direct-to-consumer service.

Original Article




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