US cable company Comcast shares closed higher in the US Monday, as it announced it had made an offer to buy Sky. It’s bid comes as Rupert Murdoch’s plan to become the sole owner of Sky has not met with a favourable response from the UK’s Competition and Markets Authority.
Comcast shares ended the US Monday session 0.20% higher at $39.58. Sky shares, meanwhile, were trading 20.68% higher at £1,333.50 around 1100 BST.
Comcast makes superior cash offer
Comcast has made a higher offer for Sky than the one that has already been accepted from 21st Century Fox. The US cable company has offered $31 billion for Sky, or £12.50 per share - a 16% increase on Murdoch’s bid of £10.75 per share.
“We think Sky is an outstanding company,” said Comcast CEO and Chairman, Brian L. Roberts. “It has 23 million customers and leading positions in the UK, Italy, and Germany.”
“Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team,” Roberts added.
Roberts also said that his company would plan to use Sky as a platform to expand across Europe.
“We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky’s UK headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of Company revenues,” he said.
A more attractive option for Sky?
After having an offer accepted by Sky back in 2016, the UK regulators are still unhappy with media mogul Murdoch’s potential influence on the UK’s political agenda and public opinion if he were to become the sole owner of the UK media business.
Murdoch has made further concessions to his bid and has said he will ensure Sky would be run and operated independently for the next ten years.
However, some analysts suggest the Comcast offer could be successful, despite Murdoch’s dogged ambition to own the entire business.
Liberum analyst said there was a “very good chance” the Comcast bid would be successful, according to a BBC article. They said not only would the higher bid be attractive, but the “lower regulatory risk” would also be appealing.