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Sky shareholders rejoice as Comcast immediately tops Fox offer

Sky office render

The bidding war for Sky is really hotting up with Comcast barely pausing for thought before trumping Fox’s latest acquisition offer.

Sky’s share price has pretty much doubled since 21st Century Fox first made a bid to acquire the rest of it back in December 2016. Sky shareholders’ wildest dreams were realised when Comcast eventually decided it wanted some of that action and it clearly means business.

Usually there’s a respectful silence in between competing mega-M&A bids but Comcast clearly has some kind of bidding ceiling in mind and hasn’t hit it yet, so why beat around the bush? A further hastening factor is the imminent announcement from some UK cabinet minister or other is going to make a pronouncement on the acceptability of Fox’s advances.

On the flip side the bidding increments seem to be shrinking. Comcast’s latest bid is £14.75 per share (£26 billion) – a mere 75p more than Fox’s last one, which it presumably hoped would be too rich for Comcast’s blood. If we assume, for the sake of argument, that Comcast’s ceiling is £16 per share, then it will be interesting to see if Disney-supported Fox chooses to make a more aggressive counter-bid.

“For now, Comcast is in pole position,” said Analyst Paolo Pescatore. “The speed of its counter bid underlines its desire to buy Sky. It might lose out to Disney for 21st Century Fox but is adamant not to lose out on the ownership of Sky.”

 

UPDATE: As expected the UK government has officially given the green light to Fox’s overtures.

 

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