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Fox to Unload Sky Stake for $15B

Jeff Baumgartner
9/26/2018
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As some industry watchers had anticipated, 21st Century Fox on Wednesday said it intends to sell its 39% stake in Sky in light of the "premium" that Comcast has already offered to acquire a controlling stake in the UK-based pay-TV and media giant.

The decision comes soon after Comcast Corp. (Nasdaq: CMCSA, CMCSK) outbid 21st Century Fox for control of Sky for £17.28 (US$22.59) per share and followed with a formal, revised offer. (See Comcast Outbids Fox for Sky With Offer of £17.28 Per Share and Will Comcast's Pricey Play for Sky Pay Off?)

Fox estimated that the winning Comcast bid values Fox's current stake in Sky at £11.6 billion, or roughly $15 billion.

Fox, which is in the process of sellng many of its TV properties to Walt Disney Co. (NYSE: DIS), said Disney has consented to Fox's decision. For its part, Disney said this transaction coupled with the divestiture of the Fox Sports Regional Networks "will significantly reduce the amount of debt Disney will incur" in acquiring Fox. (See Liberty Global Ready to Lock Horns With Comcast.)

"In light of the premium Comcast has agreed to pay for Sky, we and Disney have decided to sell 21CF's existing 39% holding in Sky to Comcast," Fox said in a statement. "We congratulate Comcast on their pending acquisition."


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Craig Moffett, principal analyst at MoffettNathanson LLC , had stated it would be "reasonably likely" that a follow-on deal would see Comcast acquire the rest of Sky at the same "stupendous" price that the US-based company had already agreed to mete out.

He and other analysts have also speculated that there's more dealing to come, as Comcast might also swing a deal to sell its 30% stake in Hulu LLC , the OTT video service with about 20 million SVoD subs and more than 1 million live TV customers.

Disney, Fox and Comcast each hold 30% stakes in Hulu. AT&T Inc. (NYSE: T) (via WarnerMedia) owns the remaining 10%.

— Jeff Baumgartner, Senior Editor, Light Reading

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