American cable operator makes bid for Sky
Comcast Corp, the biggest cable operator in the United States, has offered to pay $31 billion to buy Sky.
It's to challenge Rupert Murdoch's Fox and Bob Iger's Walt Disney for the European pay-TV jewel.
Comcast, a $184 billion media giant which owns NBC and Universal Pictures, said it was offering 12.50 pounds per share, significantly higher than the 10.75 pounds per share agreed by Fox. Shares in Sky soared 18 percent.
Present in 23 million homes across Europe and known for its technological innovation, Britain's Sky has already agreed to be sold to Murdoch's 21st Century Fox but the takeover has been delayed by concerns over the media tycoon's influence in Britain.
That has complicated a separate $52 billion deal by Disney to buy Fox assets including Sky.
"Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content," Comcast Chief Executive Officer Brian L. Roberts, 58, said. "We think Sky is an outstanding company."
The latest round of major deals indicates the pressures being felt by traditional cable television networks which have been losing customers to streaming services like Netflix Inc and Amazon.com Inc..
Shares in Sky rose to 13.08 pounds as investors hoped the ensuing bid battle would push both sides to offer a higher price.
"The initial share price reaction suggests that this story has further to run, with Sky's price leaping above the level of the already increased Comcast offer," said Richard Hunter, Head of Markets at Interactive Investor.
The proposed offer pits Comcast's Roberts against Murdoch, the 86-year-old tycoon who helped to launch Sky in Britain, and who has been edging towards finally getting his hands on Sky after he first bid for the company eight years ago.
It also pits Roberts against Disney's Iger, a long time rival after Comcast tried to buy Disney for $54 billion in 2004.
Comcast said it had not yet engaged with Sky over the proposal and nearly 90 minutes after the statement came out, Sky was yet to respond.
"We would like to own the whole of Sky and we will be looking to acquire over 50 percent of the Sky shares," Comcast CEO Roberts said.
"Innovation is at the heart of what we do: by combining the two companies we create significant opportunities for growth," he said.Published: by Radio NewsHub