Photographs by AP file photo
Sky Italia television broadcaster, with headquarters in in Milan, is a unit of the British Sky broadcaster.
Thursday, July 12, 2018
LONDON -- 21st Century Fox on Wednesday increased its takeover offer for the British satellite broadcaster Sky, extending a bidding war over one of Europe's most prized media companies and, ultimately, much of Rupert Murdoch's empire.
Fox's revised proposal to acquire full control of Sky values the company at about $32.5 billion, above the $30 billion offer put forward earlier this year by the U.S. cable giant Comcast. An independent committee of the Sky board said it would back the new bid.
The latest turn in the takeover battle highlights the allure of Sky, which offers original programming as well as video and broadband access to 23 million customers in five European countries.
Fox has endured a stringent 18-month review of its pursuit of the broadcaster by the British government, which has worried about the potential of Murdoch acquiring an outsize role in the country's news industry.
But Sky is just one element in a larger, complex corporate showdown.
The Walt Disney Co., hoping to create a global media juggernaut, has agreed to pay $71.3 billion for most of Fox, including the company's existing 39 percent stake in Sky. Buying full control of Sky, which Disney's chief executive, Robert Iger, has called "a real crown jewel," is critical to that effort.
Comcast has tried to derail Disney's efforts on multiple fronts: The cable giant has made its own takeover bid for the same Fox businesses that Disney wants, forcing Disney to raise its offer for those assets, as well as bidding for Sky specifically.
Comcast, which is preparing a potential new counterproposal for Fox's assets, may now need to raise its bid for Sky as well.
Under the terms of its revised offer, Fox said it would pay $18.54 per Sky share for the shares it does not already own. That price is about 12 percent higher than Comcast's earlier offer and 30 percent above Fox's original proposal.
Both Disney and Comcast consider Sky, which Murdoch founded three decades ago, to be among Fox's most desirable assets because its international presence would bolster either company's global reach. And Sky's ownership of sports broadcasting rights, notably those for the English Premier League, is especially attractive.
Perhaps most importantly, Sky -- whose ability to create content and distribute it through satellite and online video services is a model that U.S. media and telecommunications companies hope to copy -- would help either Disney or Comcast compete against the streaming services of technology giants like Netflix and Amazon that have upended the media landscape.
Keeping up with Silicon Valley's video ambitions has been a priority for traditional media companies, which have largely decided to compete by opening their wallets to make acquisitions.
Fox said in a statement Wednesday, "This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world, but none of whom have demonstrated the same local depth of investment and commitment to the U.K. and to Europe."
Murdoch has long believed in the value of Sky. He tried to acquire total control of the broadcaster in 2010, but was forced to withdraw amid public fury over a phone-hacking scandal involving his British tabloids.
He mounted his latest push in 2016. The effort has been weighed down by British regulators' concerns that the Murdoch family already exerts too much control over the country's media. Gaining full control of Sky, including its 24-hour news operation, could go too far, government officials have said.
Murdoch has moved to address those questions with Disney's help. Fox has proposed selling Sky News to Disney to protect its editorial independence. Britain's new culture secretary, Jeremy Wright, is expected to announce a final decision on that plan this week. His predecessor, Matthew Hancock, was widely expected to approve that solution.
Sky disclosed in a regulatory filing Wednesday that it would recommend Fox's higher bid to its shareholders. The British broadcaster withdrew its endorsement of Fox's last bid after Comcast announced its offer.
Sky has customers in Britain, Ireland, Germany, Austria and Italy -- fertile ground for any U.S. media company with global ambitions. Sky also owns TV channels.
Information for this article was contributed by Meg James of the Los Angeles Times.
Business on 07/12/2018
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