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Bidding war for Sky looms as Comcast offers €22bn

By Ian King, Business Presenter
US cable operator Comcast has made a formal ?22bn bid for Sky, the owner of Sky News, in a move expected to stoke a bidding war for the UK company.
Comcast, whose interests include the NBC TV network and the Universal Pictures movie studio, followed through on interest it registered back in February with an offer of €12.50 per share on Wednesday morning.
The value of its bid put it ahead of the proposed deal Sky had with 21st Century Fox (21CF), which wants to clinch the 61% of Sky that it does not already own but is being held up by regulatory clearances.Comcast's offer values Sky at €22bn - a 16% premium to the value put on the company by Fox's offer.:: The Fox takeover plans for Sky explained
Bidding war for Sky looms as Comcast offers €22bn

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Comcast said its bid came with a series of legally binding commitments on Sky ownership and UK investment
Sky responded by saying it was withdrawing its recommendation of the Fox deal.News of the increased offer sent shares of Sky as high as 1402p at one point - suggesting investors expect a full-blown bidding war to break out.Fox responded to Comcast's bid by saying it was considering its options and said a further announcement would be made in due course.Fox has seen its bid for full control of Sky, which was first tabled in December 2016, held up by a series of regulatory investigations.The Competition and Markets Authority (CMA) said in February that it was minded to block the deal because it concentrated too much influence over the UK media industry in the hands of the Murdoch Family Trust - the vehicle by which Rupert Murdoch, the executive chairman of 21st Century Fox, owns a controlling stake in both that company and in News Corporation, owner of The Sun, the UK's top-selling national newspaper.Fox has responded by promising to ring-fence Sky News and has guaranteed to fund it for up to 15 years.It has also offered to sell Sky News immediately to Disney, the US entertainment giant, which before Christmas agreed to pay $52.4bn for Fox's entertainment assets, including its shareholding in Sky.The CMA is due to report to Matt Hancock, the Secretary of State for Digital, Culture, Media and Sport, by 1 May on whether it thinks Fox's bid should be allowed to proceed.Accompanying its offer, Comcast made a number of commitments on how it will run Sky, many of which match pledges previously made by Fox.They include pledges to establish an independent board for Sky News and to invest in the channel, for 10 years, at least as much as the channel's budget was in 2016-17.
Comcast also promised not to buy a majority interest in any UK newspapers for five years and committed to maintaining Sky's headquarters at its current site in Osterley, west London, for five years.Comcast said it was in talks with Sky's Independent Committee "with a view to obtaining a future recommendation of the acquisition".
Bidding war for Sky looms as Comcast offers €22bn

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Brian Roberts is the chairman and chief executive of Comcast
The US firm's chairman and chief executive, Brian Roberts, said of the Sky bid: "With its 23 million retail customers, leading positions in the UK, Italy, and Germany, and its history of strong financial performance, we see significant opportunities for growth by combining our businesses."He added: "We also understand the role that Sky plays in UK society and in its customers' lives and we are determined to be responsible and trusted owners of Sky."Sky's share price rose by over 4% following the announcement - significantly above the €12.50 per share offer by Comcast. The stock closed up almost 4 percent at €13.59.Comcast stock rose 3% TO $34.34, while 21CF rose 2% to $36.78 in US trading.It partly reflected expectations among investors that Fox and Comcast - along with potential other suitors - were likely to enter a bidding war.George Salmon, equity analyst at Hargreaves Lansdown, said of Comcast's offer: "Part of the reason the value of the deal is significantly higher than what Fox originally put forward is that Sky has since secured three more years of rights to Premier League football at a reduced cost."As far as the value of Sky goes, that's a game changer."The rights may come with multibillion-pound price tags, but Sky has proven the Premier League deals are well worth the outlay."The group looks on course to deliver operating profits of €1.5bn this year, double what it earned 10years ago."Sky's statement said: "At this time, the independent committee notes that both offers are subject to pre-conditions and neither offer is currently capable of being put to shareholders."
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It said Sky would "co-operate fully" with both parties but also welcomed Comcast's bid, saying it believed its voluntary commitments to the company under the offer "should comprehensively address any potential public interest concerns".That is because Comcast has a minimal UK media market presence.
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