Fox and Comcast Accelerate Their Bidding War Over Control of European Media Giant Sky

Comcast temporarily put its ongoing bidding war with Disney over 21st Century Fox on the backburner yesterday to focus on its other big media battle, also involving Fox, for control of European media giant Sky. Late yesterday, Comcast increased its bid for 61 percent of Sky to $34 billion. That trumps the new $32.5 billion offer from Fox (which already owns the other 39 percent of Sky) yesterday morning. Before then, Comcast had been in the lead, with its $31 billion bid in April. “Comcast has long admired Sky and believes it is an outstanding company and a great fit with Comcast,” the company said after raising its offer. “Today’s announcement further underscores Comcast’s belief and its commitment to owning Sky.” Comcast also said that its increased cash offer had been recommended by Sky’s independent committee of directors. Adding another wrinkle to this week’s accelerated bidding war, the U.K. announced this morning that it has finally given regulatory approval to Fox, ending a 19-month process. However, the approval is conditional on Fox selling Sky’s media assets to whichever company ultimately ends up acquiring it. That means that the Sky battle is tied to the separate faceoff between Disney and Comcast over Fox. If Comcast prevails in its bid for Sky, it is “unlikely” to continue pursuing Fox and will focus on Sky instead, according to the New York Times. The European media behemoth has been an essential piece of both Disney and Comcast’s interest in Fox. Sky creates content that it can then distribute to its 23 million satellite and broadcast customers in five countries. Control of that company would extend both Disney and Comcast’s global presence and fortify their efforts to compete internationally with companies like Netflix. The flurry of moves around Sky came about after the U.K. Takeover Panel, which oversees corporate takeovers, ruled earlier this week that Fox had to increase its bid for Sky because the value of Fox’s 39 percent stake had gone up as a result of Disney’s higher $71.3 billion offer for Fox’s assets last month. If Fox’s stake is suddenly worth more per Disney’s new bid, the panel ruled, the value of the remaining 61 percent increased as well. Fox first bid for the remaining 61 percent of Sky back in December 2016. That kicked off an arduous U.K. government review over concerns that the deal would give 21st Century Fox executive chairman Rupert Murdoch too much control over British news media. Earlier this year, Fox agreed to sell all of Sky’s news operations to Disney (or Comcast, if that company ends up prevailing), which is what finally secured the U.K.’s approval for the deal. As that regulatory process dragged on, Comcast entered the fray in February with a Sky bid of its won. Comcast, which had no European media ownership conflicts, has already received U.K. government approval. The Comcast-Fox faceoff over Sky has temporarily taken the focus off the other major media bidding war over 21st Century Fox. Disney announced a $52.4 billion deal for Fox last December. Comcast countered on June 13 with a $65 billion offer, but Disney regained the lead a week later by raising its bid to $71.3 billion. Two weeks ago, the Justice Department approved Disney's bid for Fox, which left Comcast on the outside looking in. If Comcast wants to counter Disney’s offer, it will have to do so before July 27, when Disney and Fox’s shareholders will vote on that deal.