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Comcast outbids 21st Century Fox for Sky

Comcast lodged a winning bid of about $39 billion.

September 22, 2018 - 3:00 pm
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Hadas Gold

(CNN Money) -- Comcast outbid 21st Century Fox and its powerful backer, Disney, on Saturday in an auction for control of European broadcaster Sky.

Comcast lodged a winning bid of about $39 billion (£30 billion) for Sky following a rare, three round auction managed by UK's Takeover Panel. Both companies were vying for 61% control of Sky. 21st Century Fox already owns 39% of the company.

Comcast's offer was £17.28 ($22.57) per share. Fox offered £15.67 ($20.46) per share

Both companies must now make their offers official. Then the Sky board will make a recommendation, and Sky shareholders have until October 11 to vote.

Sky and its 23 million subscribers and direct-to-consumer model are attractive assets to US media companies that want to expand their operations to Europe and bolster their defenses against an onslaught from Netflix and Amazon.

Sky, which also sells broadband and mobile phone services, caries top original shows and valuable premium sports content.

The auction could spell the dramatic end to Fox chief Rupert Murdoch's long-running quest to buy out the rest of Sky -- Fox has been trying to take over the 61% of Sky it does not already own for years.

In 2011, Fox abandoned an effort to take over the full company following a phone hacking scandal at News of the World, the defunct tabloid also owned by Murdoch.

In December 2016, Murdoch tried again, offering £10.75 ($14.05) per share. UK media regulators put the bid through the ringer and Fox faced questions over whether it was a "fit and proper" owner, and whether the deal would give Murdoch too much power over UK media.

Regulators eventually agreed that the sale could go through as long as Sky News was spun off in an effort to protect its editorial integrity.

In February 2018, Comcast floated that it was preparing a bid at £12.50 ($16.35) per share, making the bid formal in April. Fox topped that with a £14.00 (18.30) per share offer in July, and Comcast responded the same day with its £14.75 ($19.00) offer.

Around the same time, Disney and Comcast were battling to buy most of 21st Century Fox's entertainment assets, including its 39% stake in Sky. But Disney won out in the end with a $71.3 billion offer.

Disney CEO Bob Iger had described Sky as a "real crown jewel." Assuming Sky shareholders vote for Comcast's offer, Disney could potentially sell the remaining 39% stake in Sky to Comcast.

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