£25billion bid battle for Sky: Murdoch makes £14 a share offer

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Entertainment titan Comcast was last night plotting a counter-attack after Rupert Murdoch increased his offer for Sky to £24.5billion.

Comcast, the company behind Universal Studios, is understood to be preparing a fresh bid in the battle for control of the British broadcaster.

Murdoch’s US-based 21st Century Fox upped its offer to £14 per share for the 61 per cent of Sky it does not already own, 30 per cent more than its initial bid in late 2016.

It follows an attempt to gatecrash the deal by Comcast, which waded in with an offer of £12.50 for the British TV network in April this year. 

Comcast is now thought to be readying its own increased bid in response, meaning Sky’s value could soar even higher.

Sky chief cashes in as shares soar 

Sky boss Jeremy Darroch is set to pocket a windfall of up to £42million if the takeover by 21st Century Fox goes through.

Darroch, 55, owns 689,871 shares outright, which would be worth £9.7million at Fox’s offer of £14 a share. 

The married father-of-three has another 2.3m shares coming his way if he hits targets under bonus schemes.

What happens to this stock has not yet been decided but if the schemes were to pay out in full on completion of the deal – not unusual in massive takeovers – these shares would be worth another £32million.

His potential windfall has soared as the battle for Sky has intensified.

Fox first offered £10.75 a share before Comcast bid £12.50. Analysts believe Fox’s latest offer of £14 a share could still be topped, earning Darroch even more.

Darroch, who lives in Surrey, has run Sky for more than a decade. He is an ambassador for the World Wildlife Fund.

 

George Salmon of trading firm Hargreaves Lansdown said: ‘There’s enough sub-plots in the race to acquire Sky to commission a prime-time drama.

‘Fox coming back in for Sky isn’t a surprise in itself, but the fact the offer is slightly behind what some had anticipated brings another twist … There’s every chance it might entice another counter from Comcast.’

Sky’s independent directors yesterday gave their backing to the Fox offer, but it is thought that if Comcast comes back with a higher bid, they will switch allegiance once again.

In a note to staff, Sky chief executive Jeremy Darroch wrote: ‘It is important to point out that by recommending this, it does not stop Comcast from making a higher offer of their own.’ 

Shares have surged 90 per cent since the bidding war began, and the City expects the battle to continue.

Hong Kong-based hedge fund Case Equity Partners, a Sky investor, said that the price could climb as high as £15 a share.

The tussle for Sky is one strand of a complex three-way power struggle between Fox, Comcast and Disney, as 87-year-old Murdoch looks to sell off the superpower he spent a lifetime building.

At the same time as Comcast and Fox do battle for Sky in Britain, another fight is taking place across the Atlantic between Comcast and Disney for most of Fox’s assets.

In December 2017, Disney unveiled plans to buy Fox’s prized film studio, its stake in Sky and some of its best-known TV networks following months of secret talks. 

But last month Comcast also waded into this competition by offering more money – forcing Disney to come back with a counter-proposal of £53.9billion, 36 per cent more than its initial bid. 

Sky shares fell 0.5 per cent, or 7.5p to 1494p – above Murdoch’s offer price, suggesting that traders think the battle still has further to run.

 





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