The Real Reason Behind the Bidding War for Sky

Some analysts see such moves as a hedge for US -based TV distributors such as Comcast against popular online streamers that are draining eyeballs from traditional television.

Comcast, the owner of NBCUniversal, has made a surprise £22 billion, or $30.7 billion, bid for Sky.

Comcast’s appearance in the already complex Sky drama could prompt Fox to make a higher offer or Disney to make its own direct bid for Sky.

The potential for a bidding war hurt Comcast, Fox and Disney shares in early trading Tueday.

“The board of Comcast believes that this transaction would provide attractive returns to shareholders and the combined business would be well positioned to drive future growth”, it said.

“We believe the combination of the business presents the opportunity to distribute Sky an NBCUniversal content in the USA and across Europe”, Cavanagh said.

Sky also produces its own TV shows, and owns the European rights to a range of premium American shows including “Game of Thrones”.

Sky’s investors owe a big thank you to a store employee near the group’s London head office.

Comcast, which owns NBC and Universal Pictures, said it was offering ￡12.50 per share, significantly more than the ￡10.75 per share agreed by Fox. Fox said in a statement it remains committed to its offer for Sky.

The interest from Comcast has further complicated Fox’s activity as it has agreed to sell its entertainment assets to Disney for $52 billion (£37 billion).

However, Fox has been trying to mollify competition concerns. In reaction to that, Fox has in recent weeks offered new concessions, including an extended commitment to United Kingdom news channel Sky News, to seal regulatory approval of the deal.

The CMA is consulting on its provisional findings before making its final report to the government by a deadline of 1 May. Fox has already proposed a total bit for 61% of shares totalled at $18.5 billion.

In December previous year, while the regulator was examining the proposed Fox-Sky merger, Walt Disney stepped in with an offer to buy much of Fox, including its existing stake in Sky.

It also pits Roberts against Disney’s Iger, a long time rival after Comcast tried to buy Disney for US$54 billion in 2004.

“Unfortunately, the bad outweighs the good”, he said.

If Disney refused, then Fox would have to find the money itself, “which means it is then looking at a loss if Disney did end up acquiring 100% of Sky”. Comcast would settle with owning Sky alongside Fox or Disney as minority shareholders, he said.

The younger Roberts became Comcast’s president in 1990 and CEO in 2002, having spent his whole career at the company.

Meanwhile, Davis Polk is also advising longstanding client Comcast with a team led by NY managing partner Tom Reid and including London corporate partner Will Pearce and NY corporate partner Brian Wolfe. Fox, by contrast, has been told by regulators that its bid risked giving the Murdoch clan too much influence over Britain’s news agenda.

Importantly, he said Comcast doesn’t see “any material” issues for the deal with regulators, predicting a “timely” approval of the deal.