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Comcast Outbids Fox With $40 Billion Offer For Sky In Auction (yahoo.com)
Comcast outbid Rupert Murdoch's Twenty-First Century Fox after offering $40 billion in an auction on Saturday. According to Yahoo Finance, "The U.S. cable giant bid $22.59 a share for control of London-listed Sky, bettering a $20.49 dollars-a-share offer by Fox, Britain's Takeover Panel said." From the report: Buying Sky will make Philadelphia-based Comcast, which owns the NBC network and Universal Pictures, the world's largest pay-TV operator with around 52 million customers. Chairman and chief executive Brian Roberts has had his eye on Sky as a way to help counter declines in subscribers for traditional cable TV in its core U.S. market as viewers switch to video-on-demand services like Netflix and Amazon. Comcast's knock-out offer thwarted Murdoch's long-held ambition to win control of Sky, and is also a setback for U.S. entertainment giant Walt Disney which would have likely been its ultimate owner. Disney agreed a separate $71 billion deal to buy most of Fox's film and TV assets, including its existing 39 percent stake in Sky, in June and would have taken full ownership after a successful Fox takeover.
More than ever when it comes to the tech and media industries you need to be watching out for the mergers and sell offs that are designed to allow a massive write off of debt. Sky is a defunct product now. It will die with time.
Comcast will surely try to get rid of net neutrality in the UK once Brexit happens.
We'd like to apologize in advance for Comcast screwing up Sky. Terribly sorry one of ours got out of the asylum, please accept our condolences.
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In my country, Sky News is the equivalent of Fox News and broadcasts an equivalent of the Hannity Report. The problem is, these tea-baggers have the balance of power inside the conservative party and want to introduce the policies of the US Republican party. They just won a leadership contest for control of the party, so it is "interesting times".
If I understand correctly, when you offer $40 billion to buy out a company... you're not really buying them out. What you're doing instead is that you're placing an evaluation on the portion of the company you will own at $40 billion. So if you buy 70% of all the shares at $40 billion, then the company is now worth about $57 billion overall. Then you're agreeing that after a merger of the two companies, the joined company will keep your name instead of theirs. Finally, you're taking control of their outstanding shares and exchanging them for shares in your own company.
So if I understand this correctly, this type of transaction is simply placing a weight on the value of the shares which the shareholders in the new company will have. So if I owned 20% of the company being bought which may translated to 8% of the new company, I'll have lost a great deal of control of the old company, but I'd probably have a somewhat large share of control of the new company relative to the other holders.
So, the offer of $40 billion is not really a buyout... it's a method of merging two companies in a way that shareholders understand what name with be on the new stocks they own as well as what percentage of the company the shareholders will have afterwards.
If this is the case, then it's really more of an issue of whether the shareholders in each company are willing to reap the benefits of a newer and larger company while potentially losing some of their say in how it is run.
This merger may or may not make sense from this angle. For example, if I were a shareholder, I would question the agility of the company making the offer. By making this type of offer, they're already saying they don't have a clear plan to combat the shifts in the market and that they've simply chosen to unify their assets with the hope that it will be enough to simply buy or merge with other companies instead of fixing the company they already have.
In the end... I would be extremely skeptical if I were sky... Comcast is admitting that they're basically running their own company blindly into the ground with no plan other than acquisitions and mergers (see HPe or Yahoo for how bad this fails) and if this merger happens, Comcast will take control of Sky's assets and blindly run them into the ground as well.
It seems to me that Comcast seems to believe natural selection is "Only the strong will survive" as opposed the "Adapt or die".
When Comcast finally take over the prices will rise quite dramatically. The money they spent on this deal has to be recovered some how.
I also predict that the current Sky channels that are on Free-to-Air TV (either Broadcast or FreeSat) will disappear within the year.
I hope that Comcast get a real bloody nose with this deal.
I have to wonder what Murdoch will do next? He hates losing any deal.