The bidding war for Sky, the European pay-TV service, heated up Wednesday when Rupert Murdoch’s 21st Century Fox upped its ante and, late in the day, Comcast Corp. countered with an even higher offer.
Independent directors of the London company initially approved Fox’s $32.5-billion bid, but they withdrew their support and accepted Comcast’s offer, which valued Sky at $34 billion.
“The Independent Committee welcomes this increased offer which presents an attractive premium for Sky shareholders,” Martin Gilbert, Sky’s deputy chairman, said in a statement. “We have long recognized the unique position that Sky occupies in the European direct-to-consumer landscape and unanimously recommend this offer by Comcast.”
It was unclear late Wednesday whether Fox would bid again.
The battle over Sky is just one front in a larger tug-of-war to determine which U.S. media company — Comcast or the Walt Disney Co. — wins the bulk of Fox’s entertainment assets. But in the meantime, Fox and Comcast are trying to outmaneuver each other for Sky.
Fox already owns 39% of the service, which provides original news, entertainment and sports programming and also distributes other channels to customers in five European countries. Murdoch’s company has been struggling to buy the remaining 61% since 2016 — long before Murdoch envisioned selling his company. In December, Murdoch agreed to sell the bulk of his company to Disney, including Fox’s stake in Sky.
Comcast is trying hard to spoil those plans. In February, the Philadelphia cable giant first attempted to poach Sky with a $31-billion offer that was substantially higher than Fox’s original bid. Comcast formalized its offer of $17.44 in April and, on Wednesday, increased its bid to $19.48 a share.
“We have long admired Sky which we believe is an outstanding company and a great fit with Comcast,” Comcast Chief Executive Brian Roberts said in the statement. “Today’s announcement further underscores this belief and our commitment to owning Sky.”
Fox had offered $18.58-per-share for Sky. Its bid came just days before a deadline set by the British government for Comcast to finalize its deal.
Sky is an attractive asset because it has nearly 23 million customers in Britain, Ireland, Germany, Austria and Italy — fertile ground for any U.S. media company with global ambitions. Sky also owns TV channels, including news and sports channels that hold key Premier League soccer rights. Its shares have surged since Comcast announced its interest.
Murdoch helped launch Sky in the late 1980s and his company has struggled to buy the 61% of Sky that it currently does not own since December 2016. The process slowed as various British regulators debated whether owning the service, and its popular Sky News channel, would give the Murdoch family too much control over media in Britain. The government told Fox it must sell the Sky News channel.
In the larger battle, Fox’s board accepted Disney’s June offer of $71 billion for much of the company, including the Los Angeles-based 21st Century Fox movie and television studios, FX, regional sports networks and international assets, including the 39% stake in Sky. Disney has agreed to pay the debt that Fox would incur buying the remaining 61%, should Fox be allowed to consolidate Sky.
Fox shareholders are expected to vote on the Fox-Disney deal on July 27.
That means time is running out for Comcast, which also wants the Fox assets.
Disney currently has the edge because its $71-billion offer trumped Comcast’s most recent $65-billion proposal.