Comcast Challenges Fox's Rupert Murdoch With US $31 Billion Bid for Sky

Brian Roberts Comcast

Among Comcast's commitments that were seen as important for a government review of the takeover offer were a promise to keep Sky's West London headquarters campus and to support its continued content investment.

Comcast's appearance in the already complex Sky drama could prompt Fox to make a higher offer or Disney to make its own direct bid for Sky. Including debt, the deal is worth $66.1 billion.

This news saw Sky's share price rise more than 20% to £13.33 in late-morning deals.

Speaking of Sky today, Comcast CEO Roberts said: "We think Sky is an outstanding company".

Comcast has said that buying Sky would help it expand in Europe, where the broadcaster has 23 million customers and owns rights to show the English Premier League and other professional soccer leagues.

Fox already owns 39% of Sky, but is seeking to acquire the remainder in order to facilitate a blockbuster follow-up sale of 21st Century Fox assets to Walt Disney Inc.

Sky is known in Europe for its live football broadcasts as well as for premium content such as HBO's "Game of Thrones" and in-house productions such as "Fortitude" and "Britannia".

It also attracted the attention of US hedge fund and activist investor Elliott Management Corp, which has built up a 2.5 percent stake in Sky in recent weeks.

News Corp made an £8bn takeover bid for Sky back in 2010, which was then retracted in 2011 while the phone-hacking trial was conducted.

By raising the value attributed to Sky, the company's move piles pressure on Fox to match it.

The Competition and Markets Authority (CMA)- the main regulator- already voiced its concern in January that if the deal went through, the Murdoch Family Trust would have too much influence over public opinion and the political agenda as it already owns two British newspapers, The Sun and The Times. Fox's shareholding in Sky is one of a number of assets it ultimately hoped to flog to Disney. Britain's media minister has said he will give his verdict on Fox's bid for Sky by June 14, giving Comcast a narrow window to get any takeover approval done. Earlier this month both Reuters and the Wall Street Journal reported that Comcast was thinking of reviving its attempt to counter Disney for Fox's assets even though its previous bid was rejected late a year ago.

Photo Brian Roberts, the chairman and chief executive of Comcast.

In short, Comcast is keen to expand its worldwide footprint and diversify away from the USA, especially - as some analysts say - because pressure on the cable industry there appears to be increasing.

Given the strategic importance of Sky to Fox and Disney, a counteroffer well above Comcast's is now very likely, said Jerry Dellis, an analyst at Jefferies in London.

He added: "We already have a strong presence in London through our NBCUniversal worldwide operations, and we intend to maintain Sky's United Kingdom headquarters".

"We hold the management of Sky in high regard and would welcome the opportunity to meet with them and the independent directors of Sky to discuss our plans for the business, particularly with respect to maintaining Sky's strong platform in the UK", Roberts said.

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