Comcast Reaches for Sky

Comcast said it has made an offer for U.K. satellite TV company Sky that bests an earlier proposal by minority owner 21st Century Fox by 16%.

Fox, which owns 39% of Sky, has been winding through the U.K. regulatory approval process in an attempt to acquire 100% of the company. British regulatory bodies have balked at approving the deal because they feel it would concentrate too much media power in one company’s hands.

But the Comcast bid is a surprise. The cable company had held some U.K assets in the past but sold them in the late 1990s to concentrate on the U.S. business. As domestic cable subscribers have increasingly opted for over-the-top and online video alternatives, international assets are becoming more attractive.

Sky is the largest pay TV service provider in the U.K., also has operations in Germany and Italy.

Comcast has offered £12.50 per share ($17.44), a 16% premium to Fox’s £10.75 ($14.99) bid.

“We think Sky is an outstanding company,” Comcast chairman and CEO Brian Roberts said in a statement. “It has 23 million customers and leading positions in the UK, Italy, and Germany.  Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming.  It has great people and a very strong and capable management team.”

Roberts continued, adding that Comcast plans to use the satellite operation as a growth platform, and has a U.K. presence in London through its NBCUniversal international operations. The company said it intends to maintain Sky’s U.K. headquarters and that the deal would increase Comcast’s international revenue from 9% of total revenue to 25%.

Fox had intended to make the Sky stake as part of its overall deal to sell certain assets to The Walt Disney Co. Reports have said Comcast has been mulling making an offer for those assets as well, outbidding Disney.