Sky set to be acquired by Comcast for £30.6bn after Fox trumped in sealed-bid auction

Sky PLC (LON:SKY) looks set to be acquired by Comcast Corp (NASDAQ:CMCSA) for £30.6bn (US$40bn) after the US cable giant beat Rupert Murdoch’s Twenty-First Century Fox Inc (NASDAQ:FOX) in the epic battle for the satellite broadcaster following a dramatic auction on Saturday.

Comcast bid 1,728p a share for control of the FTSE 100-listed firm, trumping a 1,567p-a-share offer by Fox, the UK Takeover Panel announced, following a rare sealed-bid auction.

READ: ‘Sealed bids’ auction for Sky draws near as investors hold out for more money

The US firm’s final offer was a big jump on its bid going into the auction of 1,475p, and Fox’s offer of 1,400p, and compares with Sky’s closing share price on Friday of 1,585p. In early trading on Monday, Sky shares rose 8.6% to just below the Comcast final bid price at 1,721.50p.

The final offer – more than double Sky’s share price before Fox made an initial approach in December 2016 – won the backing of Sky’s independent directors on Saturday.

In an RNS statement on Monday, Sky said: “As the price of the Comcast Offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast Offer.

“Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast Offer, and in order to ensure the successful closing of the Comcast Offer, and given the possibility of a delisting of Sky in the near future, urges shareholders to accept immediately.”

“Excellent outcome for Sky shareholders”

Martin Gilbert, Chairman of the Independent Committee of Sky, said today: “We consider the Comcast Offer to be an excellent outcome for Sky shareholders, and we are recommending it as it represents materially superior value.

“We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast Offer.”

Comcast, which requires 50% plus one share of Sky’s equity to win control, said it was also seeking to buy Sky shares in the market.

Fox noted the recommendation, saying it was considering options for its 39% stake in Sky and would make another announcement in due course.

Walt Disney Corp (NYS:DIS) has agreed a separate US$71bn deal to buy most of Fox’s film and TV assets, including its existing stake in Sky, and would have taken full ownership after a successful takeover of the UK firm by Fox.

In a note to clients on Monday, analysts at Liberum Capital commented: ”While Fox does not have to accept Comcast’s bid for its 39% stake, we think it will sell, leaving Comcast with 100% control. The deal may also be the catalyst for other deals although maybe not in the short-term.”

Liberum raised its target price for Sky shares to the Comcast bid level of 1,728p, up from 1,400p previously and repeated a ‘hold’ stance on the stock.

 – Adds Sky statement, share price, analyst comment –

Story by ProactiveInvestors