Comcast formally takes on Murdoch with pound sterling22bn Sky bid

Rupert Murdoch faces competition for Sky from Comcast. Jewel Samad  AFP

Rupert Murdoch faces competition for Sky from Comcast. Jewel Samad AFP

In February, Comcast floated a preliminary offer at the same price. Its bid is around 16% higher than Fox's offer of £10.75 a share.

Comcast Corp. kicked off a bidding war for Sky Plc by formalizing its 21.5 billion pound ($30 billion) offer for Britain's largest pay-TV company, throwing down the gauntlet to Rupert Murdoch's 21st Century Fox Inc. and Walt Disney Co.

Comcast announced that they have put in a superior cash offer of approximately £12.50 per share for a total of £22.0 billion, or almost United States $30.6 million.

As a effect, Sky dramatically withdrew its previous support for the Fox bid.

Sky's independent board members are expected to now review the Comcast bid, and Fox will have to decide whether it wants to increase its offer.

The acquisition will enhance Comcast's free cash flow per share in the first year, excluding one-time transaction-related expenses and, within a reasonable period of time, Comcast expects that the return on invested capital of the acquisition will exceed the weighted average cost of capital.

"Comcast believes that, combined, Comcast and Sky will create a business equipped to compete more effectively in a rapidly changing and highly competitive industry", the company said in its announcement.

Hedge fund Elliott has taken a stake of nearly 3 percent in Sky, according to its latest filing, and other shareholders have argued that Disney's $52 billion agreement to buy Fox implies a higher value for Sky. Fox cited concerns about regulatory risk.

Revenues were $22.8 billion in the quarter compared with $20.6 billion in the year-ago period.

As more people switch to streaming services, the company lost 96,000 cable TV customers.

In an email this week, Mr. Hohn said he didn't urge Mr. Roberts to go hostile in pursuit of Fox's assets.

The bid, which will be financed by additional debt, is subject to regulatory approval and the support of over 50% of the voting rights of Sky shareholders. (FOX, FOXA) on 15 December 2016 and is now terminating the Co-operation Agreement entered into with Twenty-First Century Fox on the same date. As of December, TCI also was among the top holders of Comcast shares, with a 1.5% stake, according to FactSet.

Mr. Hohn declined to comment on his stake in Fox. Fox has made multiple attempts to satisfy regulators, including by proposing to sell Sky News directly to Disney upon buying Sky. Their economic interest, which is what would count in a shareholder vote on the Disney-Fox merger, is roughly 17%.

Analysts at Liberum said a counterbid from Fox/Disney was very likely.

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