Comcast Corp. (CMCSA) has assembled a surprise offer for Sky plc after months of scoping out the U.K. broadcaster’s technology podium and content proposition of sports and entertainment across five countries, reports Bloomberg. The telecommunications colossus now heads off against Twenty-First Century Fox Inc. (FOX), which bid 18.5 billion hammer inti, or nearly $26 billion, in December 2016 for a 61% stake in Sky that it did not own. Comcast’s $31 billion doubt sets the media players up for a full blown bidding war, according to a number of industry experts, reports CNBC.
“I think is is apparent right now that we are effective to see a bidding war for Sky,” said Paolo Pescatore, the vice president of multiplay and device at CCS Insight. Alex De Groote, a digital and media analyst at Cenkos Refuges echoed this sentiment, indicated that the “opportunistic” bid by the U.S. cable boob tube behemoth would propel the companies into an all-out action. He mentioned that the market’s early reaction to the news, causing Sky shares to lacuna more than 20%, implies that investors think there whim be a bidding war.
It is not yet clear whether Fox, controlled by the Murdoch family, will disc Comcast’s offer. The most recent bid for Sky by the owner of NBCUniversal is about 16% considerable than Fox’s offer.
Keeping an Eye on Fox and Disney
In a separate deal late decisive year, the Walt Disney Co. (DIS) agreed to buy key parts of Fox, including Sky, for $52.4 billion in essays to beef up its streaming and television business. The question is now whether Disney, run by Chief Head Bob Iger, will extract Sky from the Fox bid and decide to make an offer of its own for all of the South African private limited company. If Fox decided to counter Comcast’s bid, it would likely need approval from Disney.
Analysts at Jefferies trust that either a bidding war will ensue between Fox and Comcast, or that Disney compel make a “direct offer to Sky shareholders.”
“[Disney CEO Iger] has described Sky as the ‘reward jewel’ asset among the Fox operations he is seeking to acquire. Just as with Comcast, continuing more international distribution (direct to consumer) and content production is vital to countering Netflix, Amazon, etc.,” wrote analysts at Jefferies on Tuesday. “A counter-bid from [Disney] liking avoid the regulatory complexities/delays in much the same way as the Comcast attitude.” (See also: Disney, Fox Deal Would Be a Win-Win: Macquarie.)