Sky urges shareholders to accept deal as Comcast outbids Fox

(Sharecast News) - Sky urged its shareholders on Monday to accept a takeover offer from US cable company Comcast after it outbid Rupert Murdoch's 21st Century Fox for the London-listed broadcaster.Sky said the Comcast offer of £17.28 represents an "excellent outcome" for its shareholders, at a premium of 125% to the closing price 6 December 2016, which was the last business day before Fox's initial approach. The price also represents a multiple of 15.5 times Sky's adjusted EBITDA for the 12-month period ended 30 June 2018.In an almost unprecedented auction held by the UK's Takeover Panel on Saturday, Comcast outbid Fox's £15.67 per share bid for Sky."As the price of the Comcast offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast offer. "Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast offer, and in order to ensure the successful closing of the Comcast offer, and given the possibility of a delisting of Sky in the near future, urges shareholders to accept immediately."Liberum noted that Sky shareholders have until 11 October to accept the deal. "With the independent directors of Sky backing the deal and the premium to the share price close on Friday, it is almost inevitable that non-Fox shareholders will take the offer," it said."The more interesting question is what Fox (or Fox / Disney) does with its 39% stake. Technically, it does not have to accept, which would leave Comcast with a major shareholder that could act as an irritant if it so desired. In reality, we think Fox/Disney will sell its stake in the company - it is a windfall for Fox and, for Disney, there is no direct competition in Europe between it and Comcast in the pay-TV arena."Analyst Ian Whittaker said he does not expect a significant amount of change for Sky. "It is very unlikely Comcast will look to rebrand Sky, it has pledged to keep Sky News and there is visibility on the major football contracts. Comcast is likely to take Sky's expertise in areas such as technology and customer service back to the United States to help with its operations there."