Murdoch’s Fox beats Comcast with agreed $32.5 billion bid for Sky

Murdoch’s Fox beats Comcast with agreed $32.5 billion bid for Sky

Rupert Murdoch
Rupert Murdoch.

Reuters


LONDON — Rupert Murdoch’s 21st Century Fox says it has agreed to buy Britain’s Sky in a deal valuing the pay-TV group at $32.5 billion, trumping a rival offer from the US group Comcast.

The battle for Britain’s leading pay-TV group reflects major shifts in the global entertainment industry as the world’s biggest media giants battle one another for multibillion-dollar deals to be able to compete with Netflix and Amazon.

Fox, which owns 39% of Sky and is due to gain British regulatory clearance for the deal this week, upped its offer to £14 ($18.60) a share, from its earlier £10.75 a share.

The agreed price represents an 82% premium to Sky’s shares in December 2016, before 21st Century Fox struck its original deal to buy Sky, and a multiple of 21 times 2017 earnings per share.

Murdoch’s Fox said the performance of Sky since December 2016, including its renewal of the right to show English Premier League matches at a lower price than expected, justified its higher offer.

Fox could face further competition from the US cable giant Comcast, however, after it forced Sky’s independent directors to drop their previous backing for Fox with an unexpected £12.50-a-share bid for the group in February.

The world’s biggest entertainment company and owner of NBC and Universal Pictures gate-crashed Murdoch’s bid for Sky in February. Sky’s shares closed at £15.01 on Tuesday, suggesting shareholders think the battle is not over.

To secure regulatory approval, Fox has agreed to sell Sky’s award-winning news channel to Disney to prevent Murdoch from owning too much of the British media.

Disney and Comcast are also locked in a separate $70 billion-plus battle to buy most of Fox’s assets, which include the 39% stake of Sky it already owns and the rest of the company if it emerges triumphant in Britain.

Fox said it had secured the agreement of the independent committee of Sky for the deal.

(Reporting by Kate Holton and Paul Sandle; editing by Guy Faulconbridge)

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