Comcast’s $22 bn bid for Sky throws up multiple possibilities

Comcast Corp is pursuing an audacious takeover of European pay TV giant Sky PLC, a move that has made industry watchers sit up.

Comcast chairman and chief executive Brian Roberts

Comcast said Tuesday it was planning a £22.1 billion ($30.9 billion) offer for all of Sky, topping a rival bid from Rupert Murdoch's 21st Century Fox Inc to consolidate ownership of the UK broadcaster. Fox already owns 39 per cent of Sky.

In a single gambit, Comcast chairman and chief executive Brian Roberts has scrambled the game board in multiple ways, says The Wall Street Journal.

The Guardian calls Comcast's bid for Sky bold, aggressive and cutely timed – qualities associated with Murdoch in his heyday – and says it very probably marks the start of a shootout for the UK satellite broadcaster.

The open question is who will to go head to head with Comcast. It could be Fox, whose current £10.75-a-share cash offer for Sky has been trumped by 16-per cent by Comcast. Or it could be Disney, which is in the process of trying to buy the bulk of Fox via a deal that includes the 39-per cent stake in Sky, and which could make a direct counter-offer.

Comcast's timing is seen as clever, as it opens a chance of exploiting the confusion in the opposition camps. Does Fox, given the importance of the Disney deal, have a completely free hand to raise debt and get into a bidding war for Sky? And does Disney, whatever it says about Sky being a ''crown jewel'', really regard the UK TV company as fundamental to its wider purchase of Fox assets in the US?

The very worst outcome for Murdoch would be to lose to Comcast in the battle for Sky and then see his Disney deal scuppered by US regulators, which is still a possibility. In that case, as Jefferies analysts put it, Fox would be left as ''a subscale collection of mainly US assets with India as the only material international exposure''.

In that scenario Murdoch would have been outmanoeuvred in the current frenzy of deal-making in the international media industry. It is why he is highly unlikely to just accept Comcast's cash for Fox's current 39 per cent stake in Sky. He will want to stay in this fight, observers say.

For Sky's non-Murdoch shareholders, things couldn't be better. Comcast, as a $184-billion US cable giant, is plainly a serious bidder with little regulatory baggage. Critically, it would even be prepared to have majority control of Sky with Fox or Disney as a co-traveller – it has set the threshold for acceptances at just 50.1 per cent.

In the stock market, Sky's shares shot up to £13.30 on Tuesday morning, anticipating that the bidding will go higher than Comcast's £12.50 offer.

Shares in Sky, amid worries about competition from Netflix, had slumped to 750p before Fox pounced in December 2016. The long, winding and still-unresolved UK regulatory process has not helped Murdoch's cause. Perceptions of Sky's value have also been boosted by a successful renewal of Premier League rights at a lower price than last time.

Everything now points to a big-time two- or three-way fight for Sky.