Comcast contests Murdoch Sky bid with own all-cash offer

Comcast has finally waded into the fray for Sky, confirming its proposed £22bn all-cash acquisition offer for the broadcaster, in a direct challenge to 21st Century Fox Inc.'s.

The details of the offer, announced on Wednesday, equate to a 16% premium over Fox's own £10.75 per share bid for Sky.

Tellingly, at £13.44, as of 1132BST Sky stock was trading 7.5% above Comcast's offer price of £12.5 per share, likely meaning that traders did not believe the bidding war was yet over.

In its announcement, Comcast chief Brian Roberts emphasised the importance of Sky as a launching pad for his firm's expansion into Europe, given its leading positions in the UK, Italy and Germany.

Roberts also touted the financial benefits that a combination of the two companies would bring for Comcast shareholders, adding that a transaction would add to its free cash flow starting from the first year.

Comcast also said it expected the merger to generate annual savings of about $500m.

Under the terms of Comcast's bid, Sky's shareholders would be entitled to receive any final dividend for the financial year ending on 30 June 2018 up to an amount of 21.8p per Sky share.

Roughly a half hour after the Comcast bid was made public, Sky welcomed it, with its Independent Committee withdrawing its recommendation of 21st Century Fox's offer made on 15 December.

They also welcomed the post-offer undertakings and commitments Comcast intended to give with regards to Sky's existing franchise, including Sky News, which it said should be enough to address any possible 'public interest' concerns.

Its independent committee nevertheless noted that both offers remained subject to preconditions, meaning that they could not yet be put to shareholders.

The committee also advised shareholders not to take any action until the relevant preconditions were satisfied, promising to cooperate fully with both parties in order to secure the approvals needed to satisfy those preconditions.

Not to lose sight of, 21st Century Fox's bid was part of a larger plan to sell the entire group which would results - save for Sky News - to Walt Disney.

However, it had run afoul of the Competition and Markets Authority, which had found the £11.7bn deal was not in the public interest due to the Murdoch family's ownership of the Sun, the Times and the Sunday Times under the News Corp. umbrella.

That led to the Murdoch Family Trust's announcement that it would sell Sky News, regardless of the successful sale of the company to Disney, and ensure it was funded for 15 years.

Final regulatory clearance from Culture Secretary Matt Hancock was expected by mid-June.