Comcast has swooped in with a formal cash offer for U.K. media giant Sky PLC, valuing the company at $31 billion. That’s a 16 percent premium over Fox’s standing offer, effectively killing that pending deal.
“We are delighted to be formalizing our offer for Sky today,” Comcast Chairman and CEO Brian L. Roberts (pictured above) said on Wednesday, when his company also released its first-quarter financial results. “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.”
“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.
Sorry about that, guys. Here is Fox’s response:
21st Century Fox (“21CF”) notes the announcement made by Comcast Corporation (“Comcast”) of a firm intention to make an offer for the entire issued and to be issued share capital of Sky plc (“Sky”).
21CF remains committed to its recommended cash offer for Sky announced on 15th December 2016 and is currently considering its options. A further announcement will be made in due course.
The Comcast offer doesn’t come out of nowhere: In late February, Roberts laid out his plan.
Though nothing is yet official, the fiduciary duty of Sky’s independent committee means it is obligated to seek the offer that maximizes value for shareholders. Right now, that is Comcast’s — and by a pretty good margin.
The usual regulatory process must still play out, and that can take a while. We’ll find out soon enough if 21st Century Fox ups the ante.