Publication Date: February 26, 2018
Sky / Fox has been turned on its head after Comcast announced a competing proposal at 1,250p per Sky share, plus permitted dividends that can add an additional 34.9p to the offer price if the transaction completes after mid-October. This is a healthy 16.3% headline premium to the Fox offer and investors have driven up Sky’s share price to trade at a 3.6% premium to Comcast’s offer (including dividends). We provide our high-level thoughts on the developments and views on whether Fox will come back. We also importantly address Comcast’s offer in the context of: 1) the rationale and numbers behind Comcast’s counterbid; 2) Fox’s need to control 100% of Sky, considering Disney’s pending offer for Fox assets; 3) Disney’s need to control Sky, in light of its desire to expand internationally and secure subscribers and content; 4) whether Comcast has further intentions for Fox; and, 5) potential outcomes and strategies.
1. Behind Comcast’s Counterbid: The Rationale and Numbers 2. Fox’s need to control 100% of Sky 3. Disney’s Need to Control Sky 4. The Deal Structure and Whether Comcast has Further Intentions for Fox 5. Potential Outcomes and Strategies
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