Sky battle escalates as Comcast raises offer to £26bn

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The battle for Sky intensified on Wednesday night as Comcast raised its bid for Sky, valuing the pay TV giant at £26bn.

The move by the NBC owner came less than 24 hours after 21st Century Fox increased its offer to £24.5bn.

That topped Comcast’s previous £22bn offer and is part of an escalating war between media giants including Disney.

Comcast said its sweetened offer has been recommended by Sky’s independent committee of directors.

It was now offering £14.75 a share for Sky compared with £14 from Fox. Shares in Sky closed 0.5% lower at £14.94 in London on Wednesday.

Comcast said it had “long admired Sky”, adding: “We believe it is an outstanding company and a great fit. Today’s announcement further underscores Comcast’s belief and its commitment to owning Sky.”

Rupert Murdoch’s Fox has been waiting for approval from UK authorities before putting its offer to Sky shareholders.

Fox expects the Culture Secretary, Jeremy Wright, to give Fox the go-ahead this week.

Comcast gatecrashed Mr Murdoch’s attempt to buy the 61% of Sky his company did not already own in February while the Fox deal awaited government approval.

Comcast’s initial offer was considerably higher than the Fox bid that valued the satellite broadcaster at £18.5bn.

The then Culture Secretary, Matt Hancock, said last month there would be no public interest concerns with a Comcast takeover of Sky.

If the Department of Culture, Media and Sport gives regulatory go-ahead for the bid, as is expected, then Fox has 28 days to notify shareholders that they need to vote on the deal.

The end of the week is also be the deadline for Comcast to post an offer to Sky shareholders, who then have 60 days to consider that offer under UK takeover rules.

The skirmish for control of Sky is being fought in the shadow of an even bigger battle – a struggle for control of prized entertainment assets owned by Fox, including its stake in Sky.

Disney and Comcast are locked in a battle for those businesses, which include movie studios, cable channels, National Geographic and a 30% stake in video website Hulu, as well as Indian network Star.

In June, Disney raised its offer for the assets to $71.3bn (£54bn) in cash and shares.

Under the deal, Fox would keep Fox Sports, Fox News and Fox Television Stations and make them into a new company called “New Fox”.

Established media companies like Disney are looking for deals that would help them meet the challenge of fast-growing rivals including Netflix and Amazon.

Hong Kong-based hedge fund Case Equity Partners, which has a stake in Sky, said the fact Disney was in a slightly more favourable position for Fox’s US media assets meant that Comcast would fight even harder to win Sky.

“We see a final Sky deal outcome at well over £15 per share,” said managing partner Michael Wegener.

Sky battle escalates as Comcast raises offer to £26bn

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