The shock move from America’s biggest cable TV company, which owns the NBC network and the Universal and DreamWorks film studios, trumps the existing £18.5 billion on the table from Rupert Murdoch’s 21st Century Fox. News of the higher bid electrified the City and sent shares in Sky shooting up 210p, or 18 per cent, to 1315p, within minutes of the offer hitting dealers’ screens at 7am.
It also sets up the prospect of one of the most dramatic takeover tussles for a household-name British company in many years. Comcast, which is run by chairman and chief executive Brian Roberts, son of late founder Ralph Roberts, said it planned to offer £12.50 a share to Sky investors, 16 per cent higher than the bid from 21st Century Fox.
Mr Roberts said Sky, which is based in Osterley, was an “outstanding company”. He said: “It has 23 million customers and leading positions in the UK, Italy and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming.
“The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe. We intend to maintain and enhance Sky’s business.” Comcast also said it would be prepared to co-own Sky with Fox, so long as it had majority control.
Mr Roberts said a successful takeover would allow Comcast, which earns 81 per cent of its revenue in the domestic US market, to expand into Europe. However, Sky would keep its UK headquarters in west London and Sky News would be left “to do what they do”.
Comcast employs about 1,300 people in the UK through its NBCUniversal operations. Its offer adds a new layer of complexity to Mr Murdoch’s long-delayed plan to take control of the 61 per cent of Sky that 21st Century Fox does not already own.
An agreed takeover was originally tabled in December 2016 but last September it was referred by the then culture secretary, Karen Bradley, to the Competition and Markets Authority for a full investigation. Last month the CMA said in its provisional findings that the bid was not in the public interest as the Murdoch family would have too much control over public opinion in Britain. Mr Murdoch has said he plans to sell Sky on to Disney.
Comcast traces its roots to 1963, when Ralph Roberts and two co-investors paid $500,000 for a 1,200-subscriber cable TV operator in Tupelo, Mississippi, called American Cable Systems. It has grown into one of the world’s most powerful media and technology giants, with a market capitalisation of more than £130 billion.
Comcast Cable is a video, high-speed internet and phone provider across the US through its Xfinity brand, while NBCUniversal owns Universal Pictures, DreamWorks Animation and TV channels including CNBC and The Weather Channel, as well as Universal Parks and Resorts.
Comcast said that “in an increasingly global competitive landscape, the combination of Sky with Comcast would create an organisation ideally equipped to grow, compete and innovate for the benefit of over 50 million combined global customers”.
It said adding Sky to its stable of brands would “enhance the entertainment, content creation, distribution and technology leadership of Comcast, and importantly expand Comcast’s international footprint”.