Ouch! US media giant Comcast challenges Murdoch's Sky bid with a £22bn offer

Rupert Murdoch’s £11.7bn offer was provisionally blocked by UK watchdog

The shares in Sky jumped almost 20 per cent today following the announcement that US media giant, Comcast, has submitted a rival offer to UK broadcaster’s shareholders worth £22bn.

Comcast— which owns NBC Universal and is the largest cable company in the US— had not yet engaged with Sky over the proposal.

According to Reuters, Sky’s chairman is Rupert Murdoch’s son James, so Comcast will have to gain the support of the independent shareholders for its better offer if it does not make a hostile bid.

The US media giant is believed to have tabled an offer valuing Sky shares at £12.50, giving the company a total value of £22.1bn. This bid is a 16 per cent increase on the existing offer from Fox.

Talking about the deal, Comcast chairman and chief executive Brian Roberts told media: ‘We think that Sky would be very valuable to us as we look to expand our presence internationally. The superior cash proposal values each Sky share at £12.50 in cash - a significant premium to the 21CF price currently recommended. We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares.

‘We are confident that we will be able to receive the necessary regulatory approvals. If successful, the acquisition will enhance our free cashflow per share in the first year. The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe. We intend to maintain and enhance Sky’s business.’

Fox owns 39 per cent of Sky and had submitted its offer to take full control in December 2016. However, the deal had come under scrutiny from UK watchdog, Competition and Markets Authority (CMA), which said if the takeover went ahead it could give the Murdoch family ‘too much influence’ in the UK.

Murdoch’s 21st Century Fox had criticised the CMA decision saying: ‘Regarding plurality, we are disappointed by the CMA’s provisional findings. We will continue to engage with the CMA ahead of the publication of the final report in May.’

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