LONDON, U.K. - Raising its offer to acquire the pan-European group, Sky, Rupert Murdoch’s 21st Century Fox has managed to overtake its rival bidder and the world’s biggest entertainment company, Comcast with its $32.5 billion bid.
Murdoch’s Fox has been trying to buy Britain’s Sky since December 2016 and has now agreed to raise its offer in a deal valuing the pay-TV group at $32.5 billion.
On Wednesday, Fox offered to pay 14 pounds per share, a 12 percent premium to Comcast’s offer, but below the 15.05 pounds that Sky shares were trading at for the day.
Analysts are expecting Comcast to return with a higher offer, after the entertainment giant gatecrashed Murdoch’s attempts to acquire the remaining 61 percent of Sky that Fox didn’t already own in February this year.
Comcast entered the bidding war for Britain’s leading pay-TV group at a time when Fox was entangled in a tough regulatory process.
The world’s biggest media and entertainment giants are locked in seperate battles across continents, as they try to amass more programming, bolster their content and expand overseas - in the face of tough competition for viewership from technology giants like Amazon, Netflix and other streaming upstarts.
For months now, big television giants are trying to win over Sky, which is a prized asset, considering that it is present in 23 million homes across Europe and boasts of a slate of top sport and original drama content.
On Wednesday, indicating that it wasn’t going to back down, Fox sweetened its offer for Sky and said, “This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world.”
The offer made by Murdoch’s 21st Century Fox represents an 82 percent premium to Sky’s shares in 2016 before the takeover drama started, and a multiple of 21 times 2017 earnings per share.
Welcoming the move hours later, Sky’s senior independent director Martin Gilbert said in a statement, “This offer reflects the strong position the business is in and is an attractive premium for shareholders.”
Some experts have indicated that the British government is expected to finally allow Fox to buy Sky this week, after the U.S. group agreed to sell Sky’s award-winning news channel to Disney to prevent Murdoch from owning too much of the British media.
Regulators in the U.K. have however, pointed out that if Disney succeeds in buying Fox - a deal which includes the 39 percent stake in Sky - it would be required to offer the same price for the remainder of Sky.
This, some shareholders have indicated, has set an implied higher floor for Sky’s shares.
Comcast now has a Friday filing deadline for its $31 billion offer.