Sky higher as Comcast jostles with Disney over Fox assets

07 December 2017

(ShareCast News) - Sky shares were lifted on Thursday on reports that US cable giant Comcast is interested in taking full control of the broadcaster and other assets of major shareholder 21st Century Fox, which is in advanced talks with Disney.
A deal for Disney to buy several key Fox assets moved closer to a conclusion and could be agreed before the end of the year, according to reports overnight.

Disney wants to buy Fox's film studio and its stakes in Europe-focused Sky, India's Star and other international distribution assets. Talks kicked off again last week after breaking down in October.

Comcast is also continuing to pursue Fox, according to other reports, with the rationale for the largely domestically based company of bolstering its international presence and adding to its stable of cable networks.

A day earlier, the UK's Competition and Markets Authority said it had delayed by a month its provisional decision on 21st Century Fox's £11.7bn proposed deal to take full control of Sky in order to sift through several thousands of submissions it has received. The watchdog had been expecting to publish its initial verdict on 18 December but said it would now be some time in mid-January.

"It is not unusual for us to update our timetables," a CMA spokesperson said. "In this case, we have received a large body of evidence - including numerous face-to-face hearings and more than 12,000 submissions - so it is vital that we spend the time to reach an informed and considered provisional view."

On the Fox deal, analysts at <em>Jefferies</em> said they saw Disney as the "more likely suitor" given likely regulatory concerns with a Comcast deal.

"Regulatory risks around the on-going merger of AT&amp;T-Time Warner could suggest similar antitrust concerns regarding the marrying of additional content assets with Comcast's distribution platform. With many similarities between the DIS/CMCSA assets, and what appears to be a highly probable sale outcome, to what extent taxes, succession, price, and the likelihood of approval are the key issues (in order) to the Murdochs is unclear.

"What does appear to be clear is a public process that will look to maximize value to FOXA."