Comcast is 'likely' £26bn victor in Sky bidding war

By conceding defeat on the Fox assets, Comcast signalled it would focus on Sky alone. Comcast has been locked in a battle for Sky with Murdoch, who wanted to take full control of the company he founded in 1989.

Comcast, Murdoch and Disney have conducted a complex three way bidding war as the media companies jostled for position to respond to the threat of Amazon and Netflix. Murdoch is selling most of his 21st Century Fox empire to Disney because he knows is not big enough to combat the online giants alone.

Murdoch agreed to sell his movie studio and other Fox entertainment assets to Disney. The deal included Fox’s 39% stake in Sky, which Murdoch was trying to buy outright. Comcast lodged a rival £14.75 a share bid for Sky, valuing the pay TV company at £26bn, but also tried to outbid Disney for the Fox assets.

Comcast’s decision to opt out of the Fox bidding leaves it clear to concentrate on Sky and ward off any potential higher bid from Fox or Disney. If so, Murdoch’s stake could go to Comcast, ending the media mogul’s relationship with Sky, whose early losses nearly crippled him before it turned into a football-driven profit machine.

The move by Comcast could signal an implicit agreement where Disney acquires Fox and Comcast acquires Sky, the New York Times suggested, even though Disney boss Bob Iger has called Sky a “crown jewel”.

Some analysts questioned whether it was a done deal that Comcast will be able to secure Sky.

"Does Fox-Disney walk away or does it force Comcast to pay more – the impression is that having lost the big prize Comcast will do whatever it takes to get Sky and that may yet see a couple of higher bids pushing the shares up further from here," said analyst Neil Wilson at Markets.com in a note to clients.

Analysts at Liberum, however, suggested the battle looked all but over: “Comcast's decision can be interpreted in two ways, neither of which are necessarily exclusive (1) it suggests a division of the spoils to Disney i.e. Disney is left to take the Fox US assets while Comcast gets Sky and/or (2) it is a warning shot to Disney to say that Comcast now has extra firepower to come back with an increased bid in case Fox/Disney looks to trump Comcast's 1475p bid. The end result is that the Comcast offer of 1475p is likely to be the height of any bidding.”

UBS analysts, while thinking there could be a lull in news flow over the coming weeks as Disney focuses on the Fox shareholder vote on 27 July, said they would "not completely rule out Disney/Fox returning with a higher offer for Sky".

UBS note that Comcast’s offer for Sky is conditional on it acquiring a stake of at least 50%, so with Fox holding 39% and risk-arbitration investors owning more than 20%, "potentially Comcast may have to raise its 1475p offer to win control". The analysts saw a 1,600p bid for Sky as still plausible and attractive for both Disney/Fox or Comcast.

Sky shares were little changed at £15.07 at 10.54 BST, having fallen a day earlier when Comcast announced it was pulling out of the race for the Fox assets.