Sky Recommends Accepting Comcast Offer 'Immediately'

UK broadcaster Sky has recommended its shareholders to accept an offer from Comcast for a $40 billion takeover, the company said in an official statement that was published on Monday.

“As the price of the Comcast offer is materially superior, it is in the best interest of all Sky shareholders to accept the Comcast Offer,” said the company. “Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast offer, and in order to ensure the successful closing of the Comcast Offer, and given the possibility a delisting of Sky in the near future, urges shareholders to accept immediately.”

Now it is up to Sky’s borad and shareholders to accept either of the offer, the deadline for such acceptance is on October 11.

Comcast has to secure 50 percent acceptance for the deal to go through. Because Fox already owns 39 percent of Sky, it means that Comcast is looking for 50 percent of the remaining 61 percent acceptance. That means they must get 84 percent acceptance of the board.

Comcast has outflanked rival Twenty-First Century Fox in a $40 billion takeover of British broadcaster sky on Saturday, submitting a much higher bid in a rare three-round auction that pitted two of America’s biggest media companies against one another.

The US cable giant outbid  its competitor by $3.6 billion, offering 17.28 pounds per share, or more than $22 per share, according to present exchange rates. Rupert Murdoch’s Fox offered 15.67 pounds, or more than $20 per share, according to an official statement from the Takeover Panel.

“The Comcast offer price of 17.28 pounds represents an excellent outcome for independent Sky shareholders,” the company said in its statement, also adding that among other things it provides a premium of 125 percent to Sky’s closing price of 7.69 pounds as of December 2016.

“We consider the Comcast Offer to be an excellent outcome for Sky shareholders, and we are recommending it as it represents materially superior value. We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast Offer,” said Martin Gilbert, who is the chairman of the Independent Committee of Sky, in a statement over the weekend.

Now that Comcast has beaten Fox and Disney, the focus is pivoting to the other 39 percent, as well as the streaming platform Hulu.

Comcast has said that it is willing to discuss selling its 30 percent stake in Hulu to Disney, according to a source familiar with the matter.

The Hulu streaming service is presently divided among four owners, which are Comcast, Disney, Fox (all of them holding 30 percent each), and AT&T (which owns the remaining 10 percent) through its acquisition of Time Warner.

Fox is selling Disney its 30 percent stake in Hulu as part of the larger $71.3 billion deal, providing Disney’s Iger a 60 percent ownership stake in the online streaming service.

It remains still unclear when these talks will start. Disney expects to conclude its Fox deal in 2019, while the talks to sell the Hulu and Sky stakes could kick off any time.

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