LONDON: Shares in British broadcaster Sky soared Monday after US cable giant Comcast outgunned Rupert Murdoch’s 21st Century Fox in a dramatic auction for the pan-European television operator.
In morning deals, Sky shares surged 8.8 percent to £17.24 on London’s falling FTSE 100 index, after Comcast bid £30.6 billion ($40 billion, 34 billion euros) or £17.28 per share in a blind auction held on Saturday.
Fox, which already owns 39 percent of Sky, had offered £15.67 per share to value the total group at £27.6 billion.
Management at Sky has recommended that its shareholders “immediately” accept the bid, which it has described as “an excellent outcome”.
The heart-stopping auction drama marked a climax to a long-running battle for control of Europe’s biggest pay TV provider.
“Sky shareholders are popping the champagne after this weekend’s bidding auction valued the company at eye watering levels,” said Interactive Investor analyst Rebecca O’Keeffe.
The takeover tussle comes as global players like Comcast and 21st Century Fox grapple with a fast-changing television landscape — and intense competition from online streaming giants Amazon and Netflix.
“The premium that is being offered by Comcast in indicative of how much pressure is on traditional media platforms,” added O’Keeffe.
“Their newer tech savvy rivals have revolutionised the way people engage with TV and internet content.”
Sky broadcasts blockbuster films and drama including cult US series “Games of Thrones”, and has lucrative rights to English Premier League football.
The London-listed group, which has a subscription base of 23 million, is widely regarded as one of Europe’s most profitable and powerful TV companies.
The weekend auction all but settled a titanic battle between the two media empires, but the Comcast bid remains subject to shareholder approval.
Comcast was forced to drop a separate bid to take over Fox itself because it needed the money to go after Sky.
This allowed Walt Disney Co. to complete a mega-merger with Fox that should close next year.
Saturday’s auction thus turned into a proxy battle between Comcast and Disney for Sky.
“The bidding war is over and the biggest winners in all of this are Sky shareholders,” said Markets.com analyst Neil Wilson.
“The £17.28 offer from Comcast delivered the requisite knockout blow.
“It had always been the case that Sky meant more to Comcast that it would to Disney/Fox.” —AFP