Rupert Murdoch was set to lose control of Sky TV last night as he dramatically lost a multi-billion-pound poker game after being outbid by US cable giant Comcast.
The bid for the British company by Murdoch’s 21st Century Fox of £15.67 per share, valuing the company at £27 billion fell far short of Comcast’s bid of £17.28 per share, valuing Sky at over £30 billion.
The announcement came after a day-long secret auction conducted by Britain’s Takeover Panel, in which bidding went to the maximum three rounds.
Rupert Murdoch (pictured with his wife Jerry Hall) was defeated in the bidding war over Sky
At the Central London HQ of Robey Warshaw, one of the Comcast advisers on the bid, businessmen emerged shortly after the 7pm announcement declaring ‘victory’.
Sky’s independent directors last night recommended Comcast’s bid to shareholders, who will have to vote to approve the deal.
Brian Roberts, chairman and chief executive of Comcast, said last night: ‘This is a great day for Comcast. We couldn’t be more excited by the opportunities in front of us. We now encourage Sky shareholders to accept our offer.’
Simon Robey (pictured) arriving at the Robey Warshaw investment bank yesterday. His firm advised Comcast on its takeover bid
Owning Sky, with its 23 million subscribers, will give Comcast the lucrative rights to broadcast Premier League football.
Yesterday’s auction was a poker game with the highest stakes imaginable: the future of Sky TV.
In what one source described as a ‘deep blackout’, the rival teams of bankers from Fox and Comcast were hunkered down behind closed doors across London from Friday evening in ‘war rooms’ as they prepared their bids.
As global markets awaited the result of one of the most astonishing takeover dramas ever, bankers, media barons and lawyers sweated out the day, crunching the figures in shirtsleeves. Some City insiders compared the nerve-jangling tension to Sky’s own high-octane hedge fund drama Billions.
The quick-fire auction was hosted by the Takeover Panel after both Fox and Comcast refused to declare a final offer for Sky.
It was believed Mr Murdoch, 87, was controlling his operation from his majestic 20-room top-floor apartment on Fifth Avenue, overlooking New York’s Central Park.
The other major player in the drama was the Walt Disney Company and its charismatic chairman and chief executive Bob Iger, 67, also believed to be closely monitoring events from his palatial Los Angeles home.
His input was crucial as Disney is in the process of buying Fox, so Iger would have to give his final approval for the Fox offer.
Twists and turns in the TV takeover drama
June 2010: Rupert Murdoch’s News Corporation launches a £12 billion takeover offer for BSkyB but is forced to abandon the bid a year later following the News of the World hacking scandal.
December 2016: 21st Century Fox – which was demerged from News Corporation following the hacking affair – launches an £18.5 billion to buy the 61 per cent of Sky it doesn’t own.
February 2018: Comcast launches a £22 billion counter takeover proposal for Sky.
July 2018: 21st Century Fox raises its offer to £24.5 billion. In the same month, Comcast responds with £26 billion bid.
September 22: Comcast makes the best offer of £30 billion in a dramatic Takeover Panel auction, while 21st Century Fox’s final bid comes in at £27 billion.
Iger, touted as a potential US presidential candidate, was victorious earlier this year in the £55 billion takeover of the bulk of 21st Century Fox’s entertainment assets, including its 39 per cent stake in Sky.
Fox had been trying to take over the 61 per cent of Sky it does not already own for years. In 2011, Fox abandoned an effort to take over the full company following a phone-hacking scandal at the Murdoch-owned News of the World. In December 2016, Murdoch tried again, offering £10.75 per share. But Fox faced questions over whether it was a ‘fit and proper’ owner and whether the deal would give Murdoch too much power. Regulators eventually agreed that the sale could go through as long as Sky News was spun off in an effort to protect its editorial integrity.
Enter Brian Roberts, 59, the American billionaire boss of Comcast, who lost out to Disney in the battle for Fox, but then – partly inspired by a chat with a London cabbie who gave him chapter and verse on the rival services of Sky and Virgin Media – decided to launch a counterbid for Sky, eventually reaching £26 billion for the entire company.
The auction began on Friday evening after London markets closed, with Fox, whose earlier bid stood at £24.5 billion, allowed to go first. The first bid was emailed and telephoned into the Takeover Panel’s City HQ, then shared immediately with Comcast.
Some time later yesterday, in the second round, Comcast was given its chance to improve on its existing £26 billion bid – which the Takeover Panel also passed on to Fox.
Brian Roberts’ (pictured) Comcast outbid Murdoch’s 21st Century Fox with a bid of £30billion
A source in the Comcast camp told the MoS the tension was palpable as the afternoon light faded. ‘They don’t want to send any messages to anyone about what they are doing. There’s a deep blackout going on. There’s just so much as stake,’ he said.
Justin Urquhart Stewart, of City broker Seven Investment Management, compared the bidding battle to TV drama Billions. ‘There are certainly characters in there that have distinct similarities,’ he said. ‘They should have made Billions after this – because actually what [we’re seeing here is people] re-enacting the television series.’
And Laith Khalaf, a senior analyst at Hargreaves Lansdown, compared the bidding war to Sky’s Game Of Thrones, adding: ‘It’s a battle for control of the global media world.’
Rupert Murdoch, 87, pictured with his sons Lachlan and James (left to right)
City analyst David Buik said bankers on both sides of the deal would be ‘salivating at the chops’ as they await payment for their work on the auction.
One of the senior Comcast advisors, Sir Simon Robey, founder of mergers advisory firm Robey Warshaw, was spotted leading his team at his office in exclusive St James’s Place, SW1, yesterday.
Sir Simon, 58, is one of the Square Mile’s most celebrated ‘rainmakers’ – so-called for their ability to pull off deals for Britain’s largest companies. Also spotted were his fellow partners at the firm, Simon Warshaw and Philip Apostolides.
Staff could be seen drawing window blinds closed as the auction reached its latter stages.
Yesterday evening came the decisive third round, with each side having to prepare their final bid.
Pitch too high, and the company would be saddled with a damaging overpayment for the asset; bid too low, and Sky – described as the ‘jewel in the crown’ of 21st Century Fox by Bob Iger of Disney – could pass to its deadliest rival.
How Australian newspaper mogul Rupert Murdoch grew his international media empire
1968: Mr Murdoch buys Britain’s News Of The World newspaper, building on his family’s media empire in Australia.
1969: The media mogul takes control of British tabloid the Sun.
1976: He purchases US tabloid the New York Post. It marks his second foray into the US market, having bought the San Antonio Express-News three years earlier.
1981: Mr Murdoch snaps up the owner of the Times and Sunday Times.
1985: He takes over the film unit of 20th Century Fox and a handful of local TV stations that will later become the Fox network.
1987: He buys US publisher Harper & Row, which is merged with his newly-purchased Williams Collins a few years later, becoming Harper Collins.
1989: Mr Murdoch launches Sky Television. One year later it is merged with TV company British Satellite Broadcasting (BSB) to become BSkyB.
1996: He launches the American Fox News Channel, which becomes a major US cable network.
2005: The media mogul makes his first major foray into web-based media, buying social networking site Myspace, which struggles after Facebook gains dominance. It is sold by 2011. He later calls the purchase a ‘huge mistake’.
2007: Mr Murdoch acquires financial news organisation the Wall Street Journal.
2011: His media empire is hit with a major scandal after it was revealed that journalists at the News Of The World ordered the phone of murdered schoolgirl Milly Dowler to be hacked. It later emerged that thousands of others were targeted by phone-hacking. The news led to the closure of the newspaper.
2011: News Corporation makes an offer to acquire BSkyB, but is forced to abandon its plans after becoming embroiled in the phone-hacking scandal.
January 2016: Son James Murdoch becomes chairman of Sky, having last held the role between 2003 and 2007. He had resigned following the phone-hacking scandal involving the Murdoch-owned News Of The World. The return of James Murdoch raises questions as to whether 21st Century Fox would mount a fresh takeover bid for Sky.
December 2016: 21st Century Fox tables a formal £11.7 billion takeover bid for broadcaster Sky, offering to buy the 61% of the business it does not already own.
December 2017: Walt Disney launches a separate 52.4 billion (£39 billion) takeover of 21st Century Fox’s entertainment assets, which would include its stake in Sky.
January 2018: 21st Century Fox’s bid for Sky is provisionally blocked by the Competition and Markets Authority watchdog due to fears that it would hand the Murdochs too much control over UK media.
February 2018: Comcast makes a £22.1billion offer for Sky to rival the Murdoch bid, throwing his acquisition into doubt.
April 25: Rupert Murdoch’s efforts to buy Sky have been derailed after US cable giant Comcast swooped in with a £22bn counter-bid
July: Comcast withdraws its competing $65 billion bid to acquire 21st Century Fox under the noses of Disney, who upped their offer to $71billion. But Bob Roberts’ business does increase its offer for Sky to £26billion
September 12: Rupert Murdoch increases his offer for Sky to £24.5bn.
September 20: With no final bids in Britain’s Takeover Panel say the deal will be settled in an auction between Fox or Comcast
September 22: Comcast offers £30billion in a dramatic Takeover Panel auction, while 21st Century Fox’s final bid comes in at £27billion. Sky shareholders will then have to vote on the final bids by October 11.