Comcast shares fall after $40B bid to buy Sky stake

Marco Green
September 25, 2018

CEO Rupert Murdoch's company has already agreed to sell its 39 percent stake in Sky to the Walt Disney Company, which this year acquired Fox's television and film assets in a deal valued at $71 billion. Robey Warshaw, Evercore, Bank of America Corp. and Wells Fargo & Co. were to split up to 37.8 million pounds for their work on behalf of the US cable operator, according to that same proposal.

Mo Hamza, senior analyst at Kagan, the TMT arm at S&P Global Market Intelligence said the deal was as much about distribution as content: "Sky represents a unique opportunity that is likely to be transformational for Comcast".

Sky's share price flew up nearly nine per cent in early morning trading as it urged investors to accept Comcast's £30.6bn takeover offer immediately, calling it "an excellent outcome for independent Sky shareholders".

Philadelphia-based Comcast said it hoped to complete the takeover by the end of October. Telecom providers AT&T Inc. and Verizon Communications Inc., for example, have grown their debt levels to well above $100 billion through acquisitions, which have pressured their credit ratings. A spokesman for New York-based Fox declined to comment beyond the company's earlier statement.

Comcast's winning bid quickly received the backing of Sky independent directors on Saturday.

The hefty price tag led MoffettNathanson to cut its rating for Comcast to "neutral" from "buy".

Comcast believed it needed to deliver a knockout blow given that Fox's existing stake in Sky gave it a chance of victory if it was a close second to Comcast, two sources said. Owning all of Sky would elevate Comcast's debt level to $110 billion, by Flynn's estimate.

Other reports by Click Lancashire

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