Rupert Murdoch’s 21st Century Fox has a decision to make in its pursuit of Sky
Rupert Murdoch’s long-running quest to wrestle full control of Sky was seemingly delivered a blow yesterday as, after a two-month hiatus, Comcast put its money where its mouth is.
Having originally posed “a possible offer” in February, the NBC Universal owner firmed up its 1,250p a share approach – one that values Sky at £22bn.
In response, Sky withdrew its support for a 1,075p a share offer from Murdoch’s 21st Century Fox. Sky sources stressed this move was a matter of “good housekeeping”. Sky’s board will make its mind up once regulators have had a chance to look at both offers, they said.
When Comcast seemingly gatecrashed Fox’s protracted takeover bid earlier this year, excitement was in plentiful supply; investors fully expected the media titans to lock horns and kick off a bidding war.
Read more: Sky pulls support for Murdoch deal after Comcast firms up £22bn approach
But instead of launching a counter-offer, Fox refused to be drawn and stressed the hypothetical nature of the offer from its rival. In the meantime, it concentrated on ratcheting up its charm offensive of competition regulators.
Some City analysts reckon Murdoch will be prepared to offer another 300p a share in order outbid Comcast – that would see Murdoch shelling out an extra £3bn for the 61 per cent of Sky he doesn’t already own. And he’d likely have to get Disney’s approval too.
All might not be lost for the 87-year-old media mogul, however.
After 15 months of doing battle with regulators and politicians, being pipped to the post by Comcast may leave a bitter taste for Murdoch. But losing could see him make quite a bit of money.
Sky’s withdrawal of support for the Fox offer released the Murdoch-controlled firm from a £200m break fee. And with shares popping nearly four per cent yesterday, Fox’s minority Sky stake spiked by around £300m in value within minutes. Murdoch’s company effectively netted a cool £500m yesterday without lifting a finger. Overall, Fox’s 39 per cent Sky stake has increased in value by almost £2.5bn since it agreed to sell some of its assets to Disney for $52bn (£37bn) in December 2017.
Now Murdoch must stick or twist. Let Comcast follow through with its approach and book a tasty profit, or throw another £3bn in pursuit of Sky.
Decisions, decisions.
Read more: Taking the Mickey: Have regulators just forced Disney to underwrite Sky?