US cable giant Comcast joined in the battle for pan-European satellite TV group Sky on Tuesday, outbidding Rupert Murdoch's 21st Century Fox, whose takeover ambitions have hit UK government resistance. In a surprise announcement before the London stock market opened, Comcast presented an informal all-cash offer of £12.50 per share for Sky, or more than £22 billion ($31 billion, 25 billion euros) overall.
That is substantially more than the £10.75 per share or £11.4 billion that Fox has offered for the 61 percent of Sky it does not already own. The announcement - and the prospect of a bidding war - sent Sky's share price soaring 21 percent on the London Stock Exchange. "We would like to own the whole of Sky and we will be looking to acquire over 50 percent of the Sky shares," said Comcast chief executive and chairman Brian L. Roberts. "We are confident that we will be able to receive the necessary regulatory approvals."
In a brief response, Sky advised shareholders to take no action in the absence of a formal bid. Analysts meanwhile eyed even higher offers. "Sky is a prized asset for Murdoch so this could quickly escalate into a bidding war," said London Capital Group analyst Jasper Lawler. The new twist comes after Britain's competition regulator provisionally ruled that Fox's offer was "not in the public interest". In 2016, 21st Century Fox bid for the nearly two-thirds of Sky it does not own - but a full-takeover had been held up by UK government concerns.
In an effort to get its offer over the line, Fox earlier this month vowed to preserve the editorial independence of Sky News. That came after Britain's top competition regulator ruled that the Sky takeover was not in the public interest because of media plurality concerns. Adding to the uncertainty about Sky's future ownership, Disney announced in December a $52.4-billion deal to buy 21st Century Fox. Including debt, the deal is worth $66.1 billion.
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