"Comcast kicked off a bidding war for Sky Plc by formalizing its 21.5 billion pound ($30 billion) offer for Britain's largest pay-TV company, throwing down the gauntlet to Rupert Murdoch's 21st Century Fox and The Walt Disney Co.", reports Bloomberg.
Comcast Chairman and CEO Brian Roberts said Sky withdrawing its recommendation on the Fox bid was what the United States cable giant wanted to achieve by formalizing its offer on Wednesday.
In order to receive regulatory clearance, Comcast has made a range of commitments, including maintaining Sky News's annual expenditure for ten years. That offer is reportedly 16% higher than what Fox had put forward, at £10.75 per share.
And in a bid to head off any competition concerns, the group said it would vow not to acquire any majority stake in any United Kingdom newspapers for five years.
Hopes that Comcast, the biggest United States cable firm and owner of NBC and Universal Pictures, will spark a bidding war sent Sky shares rocketing up over 3%.
In addition, Comcast says it will continue to support Sky's technology hub in Leeds, and "continue to support the creative industries in the United Kingdom and increase investment in United Kingdom film and TV production". "Comcast is gaming out the possibility of making a public case to the company's shareholders that they should reject the Disney deal, which is expected to come to a vote this summer, and opt for a Comcast tie-up instead, people familiar with the situation say".
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Comcast, whose interests include the NBC TV network and the Universal Pictures movie studio, followed through on interest it registered back in February with an offer of £12.50 per share on Wednesday morning. "We have long believed Sky is an outstanding company and a great fit with Comcast". Sky is a highly complementary business and will expand Comcast's global footprint in the United Kingdom and Continental Europe.
"Sky will be our platform for growth across Europe". He noted both companies' combined customer base of about 52 million would allow Comcast to invest more in original and licensed programming, as well as technology. That deal awaits approval of USA regulators.
"As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 and is now terminating the co-operation agreement entered into with 21CF on the same date", Sky said in a statement.
The firm had also offered to insulate Sky's news operations from the influence of Murdoch and his family to win approval of its bid.
The news comes as Comcast released its financials for Q1 of 2018, boasting a 10.7% increase in consolidated revenue, a 3.6% increase in revenue for the Cable Communications division, and a 21.3% increase in revenues for NBCUniversal, driven by the broadcast of the PyeongChang Olympics and the Super Bowl.