Feb 28, 2018

Murdochs may lose European Sky but they’ll be winners in the end

The Murdochs are not in a position to say no to a fresh offer on Sky.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

The Murdoch family is facing the very real possibility of losing control of their 39% London-based Sky PLC European pay TV business - but don’t cry for them because it will give them billions in cash. That’s after Comcast, America’s biggest TV and cable company, lobbed a $US31 billion suggested offer for Sky, which is already under offer from Fox. The pressure though is on Fox and the Murdochs because the Sky share price had been rising in recent weeks, pressuring Rupert Murdoch and Fox to improve its takeover price.

Comcast shocked markets on Tuesday with its proposed all-cash offer, valuing Sky at £12.50 per share, a 16% above the £10.75 offer from Mr Murdoch’s 21st Century Fox. Fox said it would not change its offer because Comcast’s offer was only proposed at this stage. Shares in Sky soared 20.4% to close at £13.30 in London, well above Comcast’s offer price — an indication investors expect a bidding war which in turn sent Comcast’s New York-listed shares down nearly 6% in the US. But it is hard to see Fox and the Murdochs lifting their price when the existing offer has been blocked by UK regulators on media diversity (plurality) grounds and has no chance of being approved by the UK Government. Fox offered last week to guarantee the independence of Sky News for the next 10 years to win over regulators, but that offer was ignored.

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