LONDON (Reuters) – Sky shares leapt to an 18-year high yesterday as investors bet a transatlantic battle for the European pay-TV group had further to run, after Comcast’s $34 billion bid trumped an offer from Rupert Murdoch made just hours earlier.
Comcast, the world’s biggest entertainment group, said on Wednesday it had the backing of Sky’s independent directors for a 14.75 pounds-per-share offer that came just 16 hours after Mr Murdoch’s 21st Century Fox bid 14 pounds.
The speed with which Comcast’s Brian Roberts counterbid shows how determined he is to buy Britain’s Sky, which broadcasts sports, films and TV shows to 23 million homes across Europe.
Sky’s shares rose to as high as 15.41 pounds yesterday and were trading at 15.34 pounds in mid-morning, valuing it at 26.4 billion pounds – or $35 billion – as investors bet the bidders would have to pay more to secure victory.
“This thing has gone from 10 pounds to 15 pounds in seconds, so most people have got vertigo on this one,” said Crispin Odey, a top 20 Sky shareholder. “You need a finale at the end of a great bull market and I think Sky is going to be that finale.
“It’s got legs.”
Sky’s shares are up 95 percent since Fox made its first bid in 2016, and have risen 55 percent in the last year.
The fight is part of a bigger battle being waged in the entertainment industry as the rapid growth of Netflix and Amazon force the world’s traditional media giants to spend tens of billions of dollars to keep pace.
Comcast and Walt Disney are locked in a separate $70 billion-plus battle to buy most of Fox’s assets, which would include Sky, and Disney is backing Mr Murdoch in his pursuit of the British company.
Mr Murdoch already owns 39 percent of Sky, which he helped to launch.