Sky at centre of £22bn takeover battle

Sky was at the centre of a titanic ownership battle today after US media giant Comcast launched a £22 billion bid for the broadcaster.

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.

Media titans in takeover battle

The takeover battle for Sky pits two dynastic titans of world media against each other head to head. 

Billionaire Brian Roberts, 58, is chairman and chief executive of Comcast — the business founded by his father Ralph in 1963 — and controls a third of the shares. The father of three is also a top squash player with a gold medal and four silvers at the Maccabiah Games in Israel, known as the Jewish Olympics. He is taking on another billionaire, 86-year-old media mogul Rupert Murdoch, who is still co-executive chairman, alongside son Lachlan, of 21st Century Fox. 

Another son, James, is chief executive of the company that owns the film and TV operations of the Murdoch family empire. Caught in the middle is Jeremy Darroch, chief executive of Sky since 2007.

The struggle for control of Sky involves the employers of the some of the biggest names in television on both sides of the Atlantic. 

Comcast owns the NBC network whose best known presenters include Today show anchors Hoda Kotb and Savannah Guthrie, and NBC Nightly News anchor Lester Holt. 

Familiar Fox faces include news anchor Martha MacCallum and Fox News Sunday presenter Chris Wallace, while Sky News is fronted during the week by Kay Burley, in the mornings by Sarah-Jane Mee and at night by Dermot Murnaghan.

“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”.

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