Comcast shares opened in the red in the US Wednesday, after the US cable company confirmed its £22 billion cash offer for Sky PLC. The bid, announced earlier Wednesday saw the withdrawal of support for the 21st Century Fox offer, as Sky seeks to engage with Comcast.
Comcast shares opened 0.51% lower at $33.18. Sky PLC shares were 3.63% higher at £1.355.50. Shares in 21st Century Fox opened in the green.
Comcast’s Sky offer
After announcing its intention to make a £22 billion bid for Sky PLC last year, Comcast has now confirmed its interest in the UK media business. The offer values Sky shares at £12.50, which is a superior valuation compared with 21st Century Fox’s £10.75 per share offer.
The Comcast bid also comes without the difficulties surrounding the 21st Century Fox bid and Rupert Murdoch’s existing ties to the UK news industry.
“We are delighted to be formalizing our offer for Sky today,” said Comcast CEO Brian L. Roberts.
“We have long believed Sky is an outstanding company and a great fit with Comcast. Sky has a strong business, excellent customer loyalty, and a valued brand. It is led by a terrific management team who we look forward to working with to build and grow this business,” Roberts added.
Sky withdraws support for Fox offer
Following the formalisation of the Comcast bid, Sky’s independent committee has withdrawn its recommendation of the 21st Century Fox offer which was made in December 2016.
However, the committee said it was too soon to recommend the Comcast bid and that neither bid can be formally put to the Sky board at this time.
“As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 ("21CF Offer") and is now terminating the Co-operation Agreement entered into with 21CF on the same date,” Sky said in a statement.
“The Independent Committee intends to co-operate fully with both parties to secure the relevant approvals in order to satisfy the preconditions for both offers. Until the relevant pre-conditions are satisfied, Sky shareholders are advised to take no action,” Sky added.