Media

UK likely to clear way for Comcast to bid for Sky, thwarting Fox proposal

US cable group to offer £12.50 a share, beating delayed £10.75 Murdoch bid

Sky bid: the Fox proposal values Sky at £18.5 billion but has been stymied by two lengthy regulatory reviews. Photograph: Simon Dawson/Bloomberg

Matthew Garrahan
Mon May 21 2018 - 20:00

The UK government has indicated it will not refer Comcast’s £22 billion (€25 billion) offer for Sky to the country’s media regulator, removing a hurdle in the US cable group’s race to acquire the pan-European media group.

Comcast is hoping to trump a rival bid for Sky from Rupert Murdoch's 21st Century Fox with a £12.50-a-share offer. The Fox proposal, worth £10.75 a share, values Sky at £18.5 billion but has been stymied by two lengthy regulatory reviews, first by Ofcom and then, most recently, by the Competition and Markets Authority.

The Fox side has been privately lobbying the UK government to subject the Comcast offer to equivalent regulatory treatment. But Matt Hancock, the culture secretary, said in a statement on Monday that he was "minded" not to intervene "on the basis that the proposed merger does not raise concerns in relation to public interest considerations which would meet the threshold for intervention".

Mr Hancock will come to a final decision on the Comcast bid by Thursday. He is to decide by June 13th whether to clear or block Fox’s bid for Sky.

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In a letter to Brian Roberts, Comcast's chief executive, the UK department of culture, media and sport said a Comcast-Sky combination would not have "a significantly larger presence in the UK news market" than that of Sky and Sky News and would have "no greater ability to influence the news agenda".

The Fox offer for Sky has raised regulatory concerns about Mr Murdoch's influence in the UK media market. The mogul also controls News Corp, owner of UK newspapers such as the Times and the Sun.

Opponents of the Comcast offer have lobbied the department, saying that the owner of NBCUniversal owns a stake in BuzzFeed, the digital news site. But the department said in its letter on Monday that Comcast has a “non-controlling investment” in the company and that this was not a “concern for wider UK media plurality”.

Fox has offered remedies to assuage fears about media plurality, including an offer to sell Sky News to Walt Disney.

Disney has separately agreed to acquire Fox’s entertainment assets, including its 39 per cent holding in Sky. Comcast is arranging financing for a hostile bid for the assets with the aim of knocking out the Fox offer. – © The Financial Times Ltd 2018

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