U.K. Paves Way for Comcast Sky Bid as Race Narrows With Fox
(Bloomberg) -- The U.K. government intends to allow Comcast Corp.’s 22 billion-pound ($30 billion) bid for Sky Plc to move ahead, a boost for the U.S. cable giant as it vies with 21st Century Fox Inc. for Britain’s largest pay-TV company.
Comcast’s offer for Sky doesn’t trigger public-interest concerns that would meet the threshold for intervention, Culture Secretary Matt Hancock said in a statement.
Attention now shifts back to Rupert Murdoch’s Fox, with Hancock due to make a decision by June 13 on whether to clear its offer for the 61 percent of Sky it doesn’t already own. Sky’s shares have traded consistently above the 12.50 pounds a share that Comcast offered in February, as investors anticipate that Fox will increase its 10.75-pound-a-share bid from December 2016, intensifying a bidding war.
“Now we are into the game,” said Crispin Odey, founder of hedge fund Odey Asset Management, which owns a 0.7 percent stake in Sky, according to data compiled by Bloomberg. “It’s truly take your seats and see what the bidding does.”
If Hancock were to block Fox’s proposed takeover, then Walt Disney Co., which announced a deal in December to buy the bulk of Fox’s assets including its Sky stake, could choose to make its own bid for the pay-TV company. Fox has faced extensive regulatory review in the U.K. over concerns that the Sky takeover would give Murdoch too much media influence, given his ownership of several newspapers in the country.
Representatives for Comcast and Fox didn’t immediately respond to requests for comment. Sky acknowledged the decision in a statement and declined to comment further.
Fox Chief Executive Officer James Murdoch said this month that Fox was “considering its options” regarding a revised bid for Sky, with an announcement to be made “in due course.” He said he expected Comcast to face a ‘robust’ regulatory review in the U.K., while a series of lawmakers also called for a probe of Comcast’s offer.
Hancock’s intention not to send Comcast’s Sky bid for review, however, is “perfectly rational,” said Steven Barnett, a professor of communications at the University of Westminster.
“Given that there are no newspaper holdings at all for Comcast, it always seemed unlikely there would be any public interest issue,” he said.
Hancock has invited interested parties to give feedback on his intention by Thursday regarding his decision on Comcast’s bid, after which he will come to a final ruling.
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