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April 26, 2018

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Sky’s no limit for Comcast offer

US media group Comcast submitted a 22 billion pound (US$30.7 billion) bid for Sky yesterday, prompting the European pay TV group to drop its support for a lower offer from Rupert Murdoch’s 21st Century Fox.

Sky’s independent directors welcomed Comcast’s 12.50-pound-per-share bid and said they would now engage with both Comcast and Fox. They cautioned that neither bid could yet be put to shareholders and advised them to take no action for now.

Fox, which already has a 39 percent stake in Sky, first announced its 10.75-pound-per-share cash offer in December 2016.

The deal has been held up by concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well as British newspapers including The Times and The Sun.

The proposed combination has been further complicated by Fox’s agreement to sell many of its TV and film assets to Disney, including its stake in Sky, for US$52 billion.

Yesterday, Sky also welcomed commitments the US cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel.

“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 and is now terminating the co-operation agreement entered into with 21CF on the same date,” Sky said in a statement.

Comcast’s chairman and chief executive Brian Roberts said Sky withdrawing its recommendation was what it wanted to achieve by formalizing its offer yesterday.

“The board confirming they are going to focus on the shareholders, that's the perfect step as far as we are concerned today,” he said.

Sky is chaired by Murdoch’s son James, who played a key role in building the company into a major European broadcaster with operations in Germany, Austria and Italy as well as Britain.

Sky formed a committee of independent directors to consider the bids, given James Murdoch's role as chief executive of Fox.


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