**NEW** FOX SELLS SHARES TO COMCAST

PENSIONERS’ LIAISON MEETING OCTOBER 2018
September 20, 2018
2018 BBCPA REGIONAL MEETINGS
September 22, 2018

**NEW** FOX SELLS SHARES TO COMCAST

27th September 2018
It really is all over now! 21st Century Fox have decided to sell all their shares in Sky to Comcast, giving them 100% control. The 39%
of shares that Fox still own will earn them around £12bn. This substantial pay day will ultimately help Disney who are intending to launch their own streaming service, rivalling Netflix and Amazon. This sale brings and end to Rupert Murdoch’s involvement in Sky, a company he began in 1989, which revolutionised the television industry in the UK and Europe. Murdoch will still, however, maintain some influence in
the UK due to his substantial newspaper holdings and his recent foray into commercial radio.

23rd September 2018
And the winner is…Comcast. In this extraordinary blind auction Comcast emerged as the victor. Their closing bid was £17.28 a share, some way ahead of Fox’s bid at £15.67 (less than market value at the time of the auction). This means that Comcast has paid nearly £30bn for the UK broadcaster. Deputy Chairman of Sky’s independent directors, Martin Gilbert said “We consider the Comcast offer to be an excellent outcome for Sky shareholders, and we are recommending it as it represents materially superior value.’ A good result for some but something of a major defeat for Rupert Murdoch who has now failed in his second bid to take control of Sky. Although Comcast will now own the majority of shares (61%), 21st Century Fox still has 39% and they said after the result was announced that it was “considering its options regarding its own 39% shareholding in Sky and will make a further announcement in due course”. If Disney’s takeover of 21st Century Fox is successful they will inherit these shares and therefore it will be their ultimate decision as to how to proceed. If they decide to sell, Comcast could be writing another very big cheque.

22nd September 2018
Finally, the end is nigh in the long running saga of the bidding war to own Sky. In a surprising move, the Takeover Panel, which regulates bids for British listed companies, has ordered a rare auction that will allow Fox and Comcast to make new bids for the broadcaster. The ‘battle’ has been on-going for the last two years and the Panel decided that it is the only way “to provide an orderly framework for the resolution of this competitive situation”. The process as described seems rather complicated; there will be three rounds and cash only offers, with Fox, having the lowest bid, going first. Comcast, being the rival bidder goes next and then both Fox and Comcast, in the third round, can submit new offers. The decision will be made on Saturday evening and the winning bid must confirm their offer before markets open on Monday morning. On Thursday the share price valued Sky at £27.1bn, Murdoch’s original offer was £18bn. We may well see a record price paid and some very big numbers.

20th July 2018 Comcast have dropped out of the bidding war for 21st Century Fox, leaving Disney as the only offer on the table. Whilst this may seem good news for Disney, it may not help Murdoch as Disney may decide that they don’t actually need to own any more of Sky and not give him permission to increase his bid. It may appear a pragmatic decision by Comcast to focus on their Sky offer, however, the recent decision by the Justice Department to challenge the recent AT&T ruling may have had an influence. If Comcast are successful in their bid, which has the approval of Sky’s Independent committee, they would become the world’s largest pay-TV operator, increase their revenues and also make them less dependent on the US market. Murdoch has until 8th August to submit a new bid, if Disney are agreeable.

12th July 2018, another day and another bid in this high stakes auction. Comcast have raised their offer to £26bn, an increase of more than 5% over Murdoch. This has won the approval of Sky’s independent committee. Today is the day when Murdoch and 21st Century Fox are hoping to get the approval they seek to buy the 61% of Sky they do not own. Watch this space!

*STOP PRESS* Rupert Murdoch has won approval to buy 61% of Sky which he does not own. This is no doubt welcome news for him and 21st Century Fox after 19 months of regulatory investigation but his first attempt began 10 years ago. Government approval to buy Sky however does not mean this is a certainty with Comcast and Disney still fighting it out over both 21st Century Fox and Sky. It’s not over yet!

11th July 2018 and during this turbulent week in politics, a move to the Department of Health and Social Care for Matt Hancock has meant that the DCMS has a new Minister, Jeremy Wright QC. Despite this, Murdoch appears confident that he will given approval this week for his bid for the remaining 61% of Sky that he does not own. A Government announcement is expected by the end of Thursday (12th July).
In anticipation of getting clearance, Murdoch has increased his all cash offer to buy Sky to £24.5bn, a 30% increase and 12% more than Comcast. Once Murcoch has been given the green light to buy Sky he will then have to sell Sky News. The new owner, probably Disney, will receive a monetary top-up of any shortfall in funding from Murdoch for Sky News to ensure its budget remains at £100 million for the next 15 years. We shall have to wait and see what Comcast’s next move will be in its bid to buy 21st Century Fox and Sky News.

21st June 2018 and Disney have raised their offer to buy 21st Century Fox to $71.3bn. This new offer is a 50/50 split of cash and shares and is set to compete with Comcast’s all cash offer of $65bn. The bidding war is not over as it is expected that Comcast will raise their offer once again, despite Fox’s current preference for selling to Disney. It seems that this media giants’ soap opera is set to continue.

19th June 2018 and in a written statement, the Minister for Culture, Media and Sport (Matt Hancock) outlined a new deal offered by Disney if 21st Century Fox is allowed to acquire the remaining 61% of Sky it doesn’t already own. Disney will then own 21st Century Fox but in a separate deal they will buy Sky News and have offered improved terms. They include the following:-

• a commitment from Disney to operate and maintain a Sky News branded news service for 15 years rather than 10
years
• a restriction on Disney from selling Sky News for 15 years without the consent of the Secretary of State
• an extension of the funding commitment from 21st Century Fox from 10 years to 15 years
• an increase in the total funds available to Sky News, to at least £100m per year, with operating costs
protected in real terms
• a formal commitment from Disney to preserve the editorial independence of Sky News

Matt Hancock will hope that these new terms, which guarantee Sky News independence and financial viability, will satisfy the public interest issue which has made 21st Century’s bid flounder for so long. However, he is required to consult for a further 15 days and views are sought by 5pm Wednesday 4th July 2018.

In a separate but very much related issue, the board of 21st Century Fox are meeting today, 20th June, to discuss Comcast’s rival bid for its assets. It is unknown at the moment if Disney has increased its offer in order to stop the board withdrawing their recommendation to accept Disney’s offer. The stakes are high but we will have to see how high Disney and Comcast are prepared to go.

13th June 2018 and as expected, Comcast launched a rival bid for 20th Century Fox. Their $65bn offer to buy Fox is 19% higher than rivals Disney. It was no doubt launched because of a judicial decision to throw out the American Government’s objection to AT&T’s takeover of Time Warner. This appears to mean that Comcast’s bid would be approved by regulators as the Government failed to prove that AT&T’s takeover would suppress competition. The hostile bid by Comcast will be ‘carefully reviewed’ by Fox. This new bid by Comcast is separate to the deal to buy Sky. We await more developments – I imagine the next move in this media giants’chess game will come from Disney.

 

5th June 2018 and the Culture Secretary, Matt Hancock indictated that he will give approval for 21st Century Fox’s bid for Sky on the condition that Sky News is sold to an appropriate buyer, who will guarantee its independence and fund it for 10 years. It appears that the Comcast deal has been given approval by Hancock but we await further developments from the rival bidders Disney and Comcast.

Despite the confusion and drama surrounding 21st Century Fox’s bid for Sky, its Chairman, Lachlan Murdoch (son of Rupert Murdoch) expects the deal to merge with Disney to go-ahead as they continue to work through the deal points. However, this may still not happen due to mounting rumours that Comcast are preparing a $60bn cash offer for all Fox’s assets and a separate bid to buy Sky. Given this speculation, Murdoch has said that the company is considering its options with an announcement to follow, as they need to consider their fiduciary duties towards their shareholders. This latest instalment means that Comcast and Disney could engage in a bidding war not just for Sky but 21st Century Fox. This has taken the focus away slightly from the Sky deal as the days are counting down until the Secretary for DCMS makes his decision by 30th May regarding 21st Century Fox’s bid for Sky.

11th May 2018 and there have been more developments in the continuing saga of the battle for ownership of Sky and Sky News between 21st Century Fox, Disney and Comcast.

The UK takeover panel recently ruled that if Disney completes its takeover of 21st Century Fox they have to make a takeover bid for Sky even if Fox’s (Murdoch) bid for the 61% of Sky it doesn’t own, is turned down.

Meanwhile, Comcast’s £22bn bid for Sky has rattled many cages and Sky’s independent board who initially encouraged Sky’s shareholders to accept Murdoch’s offer, has now withdrawn that recommendation.

To enhance their offer, and also avoid any complaints of media plurality, Comcast have pledged to keep Sky’s HQ in Osterley, south-west London and guarantee the editorial independence and funding of Sky News for at least 10 years. Also, and perhaps crucially, they have said they are not be interested in acquiring a majority share in any UK newspaper for 5 years.

It would appear that the next move may come from Murdoch via Disney. He needs Disney’s approval to improve the offer (£18.5bn) but will have to raise it by at least £4bn to even nudge ahead of Comcast’s bid.

We may know tomorrow (1st May 2018) what the Competition and Markets Authority’s recommendations are to Matt Hancock, Minister for Digital, Culture, Media and Sport. He has 30 days to make his decision regarding Murdoch’s bid for full ownership of Sky.

Once that decision is made it seems that another bidding war will begin between Disney and Comcast for Sky and Sky News. Since Comcast’s offer the shares have already risen £1 over what their bid was. It seems that the real winners will be Sky shareholders. The pockets of both companies are deep and the stakes are high; it is anyone’s guess who will win the next round of this battle of media giants.

30th April 2018 Hot on the heels of Disney’s bid last December to buy the bulk of 21st Century Fox’s business, which includes its stake in Sky, another media giant has entered the arena making an alternative offer to purchase Sky.

6th March 2018 US cable TV giant Comcast has made a £22.1bn bid for Sky, challenging an existing offer from 21st Century Fox.

Rupert Murdoch’s 21st Century Fox had already agreed an £18.5bn deal to buy the 61% of Sky it does not already own.

This offer was referred to the Competition and Marketing Authority (CMA) who provisionally ruled it would not be in the public interest. The final CMA Report will be delivered to the Culture Secretary by 1st May and he will have 30 days to consider his decision.

Comcast is a US multinational media and telecommunications giant. Its cable TV business is one of the largest in the US, and Comcast Cable also sells internet and phone services. It owns NBCUniversal, which has news, entertainment and sports cable networks such as NBC and CNBC, as well as film giant Universal Pictures. Dreamworks Animation, which has made films including Shrek, Madagascar and Kung Fu Panda, is a subsidiary of Universal Pictures.

The reason Comcast want to buy Sky is because it would give them access to pay-tv in the UK, Germany and Italy and a presence in Spain, expanding their business beyond the US. This could well make 21st Century Fox’s bid redundant and any counter bid would have to be approved by Disney. Analysts are saying that Comcast’s bid may very well succeed as it would be attractive to the regulators as there would be no media plurality issue and shareholders would benefit. If Comcast are successful it would also give them an advantage against their competitors.

It would seem there may be more twists and turns ahead before we know who has won this media battle of the giants.

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