Comcast Raises Its Offer for Sky to $34B

Comcast Corp. (CMCSA) has escalated a bidding war with Twenty-First Century Fox Inc. (FOX) by raising its offer to buy Sky Plc to $34 billion.

The company said in a press release that its increased superior cash offer has been recommended by the Sky Independent Committee of Directors, and it has received relevant regulatory approvals in the EU, Austria, Germany, Italy and Jersey. "Comcast has long admired Sky and believes it is an outstanding company and a great fit with Comcast. Today’s announcement further underscores Comcast’s belief and its commitment to owning Sky," said the firm on Wednesday.

Earlier in the day, Rupert Murdoch’s media conglomerate said it had secured a deal to acquire the British television broadcaster after increasing its offer to £14 per share ($18.56), which values Sky at $32.5 billion. Fox, which already owns a 39% stake in Sky, said its decision to pay a 82% premium to Sky’s share price in December 2016  — the date when the two companies first agreed on a deal  — was justified by the British firm's strong performance.

Comcast first disrupted Fox’s long-standing efforts to acquire the rest of Sky when it tabled a surprising £12.50 ($16.56) per share offer for the British broadcaster in February.

Comcast has also been involved in a heated battle with the Walt Disney Co. (DIS) to purchase most of Fox’s assets. In May, Reuters, citing anonymous sources, claimed that Comcast was seeking $60 billion of new financing in order to make a fresh all-cash offer. (See also: Comcast Lining Up Funds to Bid for Fox: Report.)

At present, Disney is in pole position to win the bidding war, having recently received conditional antitrust approval from the Justice Department to take over Fox for $71.3 billion. If that deal goes ahead, the Burbank, California-based company will own 39% of Sky and is unlikely to want to cede that stake to Comcast, one of its biggest rivals. 

Sky, which sells broadband and mobile phone services and is a leading pay-TV provider in the UK, is viewed as attractive asset for U.S. companies keen to expand in Europe and compete with the likes of Netflix Inc. (NFLX) and Inc. (AMZN).