Comcast battles Rupert Murdoch's Fox in $31B bid for Britain's Sky TV

Kevin McCoy | USA TODAY

Show Caption Hide Caption Comcast enters race for Sky with $31 bln offer U.S. cable giant Comcast offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch's Fox and Bob Iger's Walt Disney in the battle for Europe's biggest pay-TV group.

Comcast, the parent of NBC and Universal Pictures, launched a nearly $31 billion bid for British satellite pay television broadcaster Sky, a move that could trump media mogul Rupert Murdoch's ambition to acquire the UK media prize.

The company would use Sky as a platform for growth in Europe, complementing its presence in London through NBCUniversal international operations, Comcast CEO and Chairman Brian Roberts said.

The proposed cash offer — which translates to £22 billion — values each Sky share at £12.50, representing a 16% percent premium to the rival bid made by Murdoch’s 21st Century Fox.

Sky has 23 million customers and leading positions in the UK, Italy, and Germany, Roberts noted, with a proud record of investment in news and programming.

"This is a great asset, and it has been for several decades," he added during a morning conference call with U.S. investors. "And my instincts are it can do even better."

Comcast would maintain Sky's UK headquarters and use its entertainment, distribution, and technology to help it "more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape," he said.

The transaction would increase Comcast's international revenues from 9% to 25% of the company's revenues, and would boost its free cash flow per share in the first year after the transaction is finalized, he added.

Comcast shares were down nearly 5.3% at $37.50 in morning trading. Sky shares soared 21.2% on the London Stock Exchange.

Sky offers a wide range of entertainment, business and, sports programming. This month, the company successfully won continued UK broadcast rights for England's Premier League soccer matches for 2019-2022. NBCSN, a division of Comcast's NBC Universal, currently holds Premier League broadcast rights in the U.S.

Driven by Murdoch's expansion ambitions, 21st Century Fox has long tried to buy the 61% of Sky it does not already own. But the company's $15 billion acquisition offer has been stalled by regulatory issues.

Fox announced its latest bid for Sky in December 2016. Murdoch's family previously attempted to acquire the company outright in 2011, but abandoned the transaction amid public uproar over a News Corp phone-hacking episode and alleged bribery scandal.

Fox News will launch a new streaming service It’s called Fox Nation.

The latest stumbling block to a Murdoch takeover emerged last fall after UK Culture Secretary Karen Bradley said she planned to refer the proposed deal to the Competition and Markets Authority for review on corporate governance, broadcasting standards and concerns about concentration of too much media power in one company.

Along with a 39% stake in Sky, Murdoch and his sons, James and Lachlan, control three British newspapers — The Sun, The Times and The Sunday Times — through News Corp. U.K.

The since-launched review is expected to run approximately six months.

Separately, 21st Century Fox is shifting toward a smaller media empire with the planned $52.4 billion proposed sale of its movie and TV studio to Disney that was announced in December 2017.

After the deal is finalized, Fox would keep the company's Fox network, Fox News Channel and Fox Business Network, as well as sports networks FS1, FS2, Big Ten Network, and 28 local TV stations.

More: Fox $15 billion bid for Sky likely delayed for more regulatory review

More: As Fox prepares for Disney sale, cable revenues drive strong quarter

More: Disney to buy key 21st Century Fox assets for $52.4 billion

Contributing: Brett Molina, Mike Snider