Britain won't bar Comcast from buying Sky, but Fox is still a strong contender

Britain won't bar Comcast from buying Sky, but Fox is still a strong contender
Sky is Britain’s largest pay-TV company. (Daniel Leal-Olivas / AFP/Getty Images)

The British government intends to allow Comcast Corp.'s $30-billion bid for Sky Plc to move ahead, a boost for the U.S. cable giant as it vies with 21st Century Fox Inc. for Britain's largest pay-TV company.

Comcast's offer for Sky doesn't trigger public-interest concerns that would meet the threshold for intervention, Culture Secretary Matt Hancock said in a statement.


Attention now shifts back to Rupert Murdoch's Fox. Hancock is due to make a decision by June 13 on whether to clear Fox's offer for the 61% of Sky that Fox doesn't already own. Sky's shares have traded consistently above Comcast's February offer, as investors expect Fox to increase its own bid from December 2016, intensifying a bidding war.

If Hancock blocks Fox's proposed takeover, then Walt Disney Co. — which announced a deal in December to buy the bulk of Fox's assets, including its Sky stake — could choose to make its own bid for the pay-TV company. Fox has faced extensive regulatory review in Britain over concerns that the Sky takeover would give Murdoch too much media influence, given his ownership of several newspapers in the country.

Representatives for Comcast and Fox didn't immediately respond to requests for comment. Sky acknowledged the decision in a statement and declined to comment further.

Fox Chief Executive James Murdoch said this month that Fox was "considering its options" regarding a revised bid for Sky, with an announcement to be made "in due course." He said he expected Comcast to face a "robust" regulatory review in Britain, while a series of lawmakers also called for an investigation of Comcast's offer.

Hancock's intention not to send Comcast's Sky bid for review, however, is "perfectly rational," said Steven Barnett, a professor of communications at the University of Westminster.

"Given that there are no newspaper holdings at all for Comcast, it always seemed unlikely there would be any public interest issue," he said.

Hancock has invited interested parties to give feedback on his intention by Thursday regarding his decision on Comcast's bid, after which he will come to a final ruling.

Mayes writes for Bloomberg.


1:45 p.m.: This article was updated with additional details and with comment from professor Steven Barnett.

This article was originally published at 6:50 a.m.