Sky Posts Strong Sales Before Likely Fox-Comcast Bidding War
(Bloomberg) -- Sky Plc reported another set of strong quarterly results, a boon to shareholders anticipating a bidding war between 21st Century Fox Inc. and Comcast Corp. for the U.K. pay-TV broadcaster.
Sky added 38,000 new customers in the three months ended March 31 and nine-month like-for-like revenue rose 5 percent to 10.1 billion pounds ($14.4 billion), the London-based company said in a statement Thursday.
“No matter what happens to the company’s ownership over the next few months, we all feel that Sky’s a business in a strong position,” Chief Executive Officer Jeremy Darroch said on a call with reporters. “We’re well placed for the future.”
Rupert Murdoch’s Fox is weeks away from hearing the fate of its 11.7-billion-pound takeover of Sky, with a U.K. government decision due by June 13. Comcast, which has made a rival proposal for Sky at a 16 percent premium to Fox’s bid, is expected to formalize its offer shortly, setting up a bidding contest.
The expectation of a tussle between Fox, which already owns 39.1 percent of Sky, and Comcast has sent Sky’s stock above Comcast’s 12.50 pounds per share offer announced in February. Fox bid 10.75 pounds per Sky share in December 2016.
Darroch said Sky had been cooperating with Comcast to help its regulatory process, but declined to comment further until Comcast makes a firm bid.
Sky’s shares rose 0.6 percent to 13.16 pounds at 8:15 a.m. in London, a 5.3 percent premium to Comcast’s proposed offer.
Fox ultimately plans to offload Sky to Walt Disney Co. as part of a $52.4 billion deal for the bulk of Fox’s media and entertainment assets announced in December.
The prospects of the Fox-Sky deal currently hang on whether U.K. competition regulators think the tie-up would give Murdoch -- whose News Corp. owns The Times, The Sunday Times and The Sun newspapers -- too much influence over British media. They will give their recommendation to Culture Secretary Matt Hancock by May 1.
Fox has offered a series of concessions to get the Sky deal through. They include giving Sky News an independent editorial board insulated from Murdoch’s influence, or selling the channel to Disney.
Should the Fox-Sky deal be blocked and Disney completes its Fox acquisition, Disney would be forced to make its own 10.75-pounds-per-share bid for Sky, U.K. regulators said last week.
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