Comcast appears to have won the race to buy 61% of Sky to the tune of $39bn after heading off competition from Fox in an unusual blind auction.
The UK’s regulatory body, the Takeover Panel, demanded that a blind auction take place after the competitors entered bids that were close to one another in value.
Comcast Chairman and CEO Brian Roberts called it a “great day” for his company, while Sky said that it had to accept the higher offer, which “represents materially superior value” and delivers an “excellent outcome” for the broadcaster.
Sky had been up for bidding for some time, and both Rupert Murdoch-allied Fox and Comcast were vying to take over the reins. Murdoch and his company, however, found themselves delayed as regulators questioned whether he already owned too much of the UK’s media output. Two national newspapers are already under his belt.
This allowed Comcast to jump in at the 11th hour and secure a media purchase as an outside expectation.
A further complication comes in the form of Disney, which is buying the other 39% of Sky from Fox as part of a larger $71bn deal announced earlier this year. Disney is acquiring Fox from Murdoch and other shareholders in exchange for stock.
Disney will likely relinquish its stake in Sky at the value of the share price set by Comcast in the blind auction, which will give the US media company a full run at the UK market.
Sky is one of the most profitable TV companies in the UK and Europe. This is due in large part to its successful soccer game empire, which has helped the company build up a subscriber base of 23 million, a sizable proportion of the UK.
In the face of growing competition from online rivals such as Amazon and Netflix, the media landscape is changing rapidly, and Comcast hopes to find new ways to expand its market reach.
This has led it to purchase Sky, which Roberts labeled “a great platform, tremendous brand” while hailing the strength of its management. He said that the aim of the acquisition is to “quickly, efficiently and meaningfully increase our customer base and expand internationally”.
Roberts said that he hopes the takeover will be complete before the end of 2018 and that his company will “encourage Sky shareholders to accept our offer.”
Meanwhile, Sky Chief Executive Jeremy Darroch said that this is the “beginning of the next exciting chapter for Sky” and expected the move to cement its position “as Europe’s leading direct-to-consumer media company”.
Fox confirmed that it is considering its options for the 39% still in its hands but hailed the performance of its team to deliver the value for Sky for which Comcast bid.
The news will hopefully help draw the takeover process of Sky to a close. It has been long in the making, and Murdoch originally pursued it in the last decade before phone-hacking revelations across the UK media put a hold on any developments as the public lost trust.
Disney is still awaiting official confirmation of its takeover of most Fox assets but expects this to go through early in 2019.