Comcast finally outbids Fox in a nearly $39 billion takeover of Sky

Comcast Corp.   topped 21st Century Fox Inc.   in a three-round auction for Sky Plc  , winning the British broadcaster with a $38.8 billion bid that ends a drawn out takeover battle.

Comcast’s offer of £17.28 of a share, or about $22.59, surpassed Fox’s highest bid of £15.67 after bidding Saturday, in a rare auction held by British regulators.The £29.7 billion pre-auction valuation was by far the highest ever for such a process in the U.K., the Wall Street Journal reported.

The winning bid represents a premium more than doubling Sky’s value before Rupert Murdoch’s Fox began its pursuit in December 2016. That’s when Fox made an all-cash offer to buy the portion of Sky it didn’t already own. Fox currently owns 39% of the British broadcaster.

Fox’s initial offer for Sky came to £10.75, or $14.27, per share. But after the offer hit several regulatory roadblocks, Comcast was enticed to try its might in expanding its global footprint. In February, the NBCUniversal owner made a surprise bid of £12.50 per share, which Fox one-upped in July with an offer of £14 a share. That same month, Comcast came back with a bid of £14.75, valuing Sky at $34 billion.

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Ultimately, Sky may be viewed as consolation prize for Comcast after it lost out to Walt Disney Co.   earlier this year for Fox’s entertainment assets, for which Disney agreed to pay $71 billion, including a 39% stake in Sky that Fox had long held. That bigger deal is expected to close in coming months.

If Fox had won this weekend’s auction for Sky, Disney would ultimately have taken 100% control of the pay TV company. Instead, attention turns to whether Disney will sell the 39% stake in Sky —especially now that its value was boosted by the weekend’s bidding competition—or remain a minority partner for Comcast.

Dave Heger of Edward Jones told MarketWatch before the auction that even if Comcast wins the auction and becomes the majority owner of Sky, the NBCUniversal owner will still likely try to acquire the remaining 39% of Sky from Disney.

Comcast stock closed higher Friday; it trades down 5.4% year to date. Fox shares slipped 0.5% Friday, up over 28% year to date. Disney’s stock, down 1% Friday, stands up 2.7% so far in 2018.

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