Sky drops Fox after Comcast's higher offer

CREDIT AP

CREDIT AP

Comcast's potential disruption of Murdoch's plans comes almost seven years after the media mogul withdrew a previous bid for full control of Sky, an offer that was derailed by the phone-hacking scandal that resulted in the closure of his newspaper The News of the World.

"We think Sky is an outstanding company".

Sky is based in London and has pay-TV operations across Europe, offering a platform for USA companies like Comcast and Fox to expand overseas.

Comcast said the bid would bring attractive financial benefits to Comcast shareholders, and is expected to be accretive to Comcast's free cash flow per share in year one.

Comcast said it was in talks with Sky's Independent Committee "with a view to obtaining a future recommendation of the acquisition".

Sky shares rose 3.5 percent to 13.54 pounds by 1310 GMT - well above the offer price, implying that some shareholders anticipated a bidding war.

"With its 23 million retail customers, leading positions in the UK, Italy, and Germany, and its history of strong financial performance, we see significant opportunities for growth by combining our businesses", he added.

Sky News has become a flash point in the Fox's bid due to competition fears centring on Mr Murdoch's ownership of The Sun, The Times and The Sunday Times newspapers.

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Comcast CEO Brian Roberts pledges to preserve Sky's editorial independence and refrain from acquiring a majority interest in any British newspaper for five years to help ensure media diversity.

And in a bid to head off any competition concerns, the group said it would vow not to acquire any majority stake in any United Kingdom newspapers for five years.

Comcast had already bought NBC Universal back in 2011 and now it clearly fancies expanding its operations internationally. The stock closed up nearly 4 percent at £13.59.

The Philadelphia-based owner of NBCUniversal, says the addition of Sky's customer base will enable it to invest in more original and acquired programming. Disney struck a deal to buy most of its entertainment properties, including its stake in Sky.

"The group looks on course to deliver operating profits of £1.5bn this year, double what it earned 10years ago".

On Wednesday, Sky also welcomed commitments the U.S. cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel. These include a promise to maintain investment in Sky News and preservation of its editorial independence - "issues that have become sticking points for the United Kingdom regulators scrutinising the Fox bid for Sky", says the Financial Times.

Comcast, which owns cable channels MSNBC and CNBC, has already said it believes its approach would escape concerns over media plurality because of its "minimal presence" in United Kingdom media.

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