US media group Comcast increases its offer within 24 hours of 21st Century Fox announcing an improvement in its own bid
Battle for Sky intensifies
- American telecommunications giant, Comcast, has raised its offer to 1475p in cash for UK broadcaster Sky
- The bid follows the increased offer of 1400p from Murdoch’s Fox announced only yesterday
- The Share Centre continues to recommend Sky as a ‘hold’ for medium risk investors
The long-running battle for control of Sky is heating up with news today that US media group Comcast has raised its offer for the UK broadcaster within 24 hours of 21st Century Fox announcing an improvement in its own bid.
Comcast is now offering 1475p in cash, valuing Sky at £25.9bn, which is a considerable increase on its initial offer of 1250p in April. Only yesterday Fox had raised its own bid to 1400p, which compares to the 1075p it had agreed initially in December 2016.
The speed with which Comcast has responded to Fox’s bid speaks volumes about the determination of Comcast, led by Brian Roberts, to win the day. It is perhaps no surprise that the market seems confident that the battle has further to go as the share price is now at 1520p, well above the latest Comcast offer. That is remarkable given that Sky’s shares are already up 50% so far this year. It seems that sky is caught in a bigger struggle between US media groups with deep pockets who want more international exposure and are ever more aware of competition from newcomers such as Amazon and Netflix. Given that, and the complication of the Disney offer for other parts of Fox, we still believe that lower risk investors may want to lock in recent gains while others should hold on.
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