Rupert Murdoch’s media giant 21st Century Fox agreed the acquisition of British Sky in a deal valuing the TV group at 32.5 billion USD. Thus, the company surpassed the competitive offer of the American group Comcast.
The battle for the leading British pay-TV group reflects the huge changes in the global entertainment industry, where the world’s largest media giants struggle with each other for multimillion-dollar deals to compete better with Netflix and Amazon.
Fox, which owns 39% of Sky and has to get approval for the deal from the British authorities this week, has raised its bid to 14 GBP per share on its earlier offer of 10.75 GBP. The negotiated price is a 82% premium over the trading price of Sky’s shares in December 2016 – before the initial deal is concluded, and is 21 times the earnings per share for 2017.
Fox said that the performance of Sky in December 2016, including the renewal of the rights to broadcast the English Supreme League for a lower amount, justifies the higher bid.
Fox, however, may face additional competition from US cable giant Comcast after urging independent directors of Sky to give up their previous support for Fox with an unexpected bid of 12.50 GBP per share for the group in February.
The world’s largest entertainment company, NBC and Universal Pictures, overtook Murdoch’s offer for Sky in February. Sky shares closed at £ 15.01 on Tuesday, suggesting that the war may not be over.
To ensure regulatory approval, Fox negotiated the sale of Sky News Channel to Disney, as otherwise Murdoch’s influence on the British media would be too strong. Disney and Comcast are taking a separate 70 billion USD battle to buy most of Fox’s assets, which include the 39% stake in Sky and the rest of the company if it is a winner in the UK.
Fox said he had negotiated the agreement of the independent Sky Commission for the deal.