Sky Regulatory News (SKY)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

For immediate release 22nd September 2018

Sky Plc ("Sky")

Accept the Recommended Comcast Offer Immediately

Throughout the extended offer period, the Independent Committee of Sky has been mindful of its fiduciary duties and obligations under the Takeover Code, and has focused on maximising value for Sky shareholders. Importantly, this included the negotiation of a Cooperation Agreement with 21CF in December 2016 which included certain safeguards for independent shareholders, including a standstill preventing 21CF from acquiring shares. This Cooperation Agreement facilitated the then recommended offer by 21CF but preserved a level playing field in order not to foreclose any potential competitive interest.

Following the possible offer statement from Comcast Corporation ("Comcast") on 27 February 2018, Sky has been in a competitive takeover situation and Sky shareholders have benefited from seven months of competitive tension which has ultimately led to an auction process that successfully concluded today. The Independent Committee notes that both the cash offers from Comcast and 21CF of £17.28 and £15.67 per Sky share (respectively the "Comcast Offer" and the "21CF Offer") are final and are now incapable of being increased.

The Comcast Offer price of £17.28 represents an excellent outcome for independent Sky shareholders:

· a premium of 125% to the closing price of £7.69 on 6 December 2016, the last business day before 21CF's initial approach;

· a multiple of 15.5 times Sky Adjusted EBITDA of £2,349m for the twelve month period ended 30 June 2018;

· a ten-year total shareholder return (since 1 July 2008) of +402%, versus the FTSE 100 total shareholder return over the same period of +97%.

The Independent Committee, which has been so advised by Morgan Stanley, PJT Partners and Barclays as to the financial terms of the Comcast Offer, considers the terms of the Comcast Offer to be fair and reasonable. Morgan Stanley and Barclays are providing independent financial advice to the Independent Committee for the purposes of Rule 3 of the Takeover Code. In providing their financial advice to the Independent Committee, Morgan Stanley, PJT Partners and Barclays have taken into account the commercial assessments of the Independent Committee.

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.

The Independent Committee notes Comcast's earlier announcement that, following the conclusion of the auction procedure, Comcast Bidco Limited is seeking to make market purchases:

Eligible Sky Shareholders who are institutional investors outside the United States interested in selling their Sky Shares to Comcast Bidco should contact BofA Merrill Lynch Corporate Broking at +44 20 7995 2794 or dg.corporate_broking_trading@baml.com. Retail investors should contact their broker; and

Due to regulatory requirements, Comcast Bidco is unable to purchase Sky Shares from Sky Shareholders incorporated or located in the United States, or where the Sky Shares would be sold from the United States.

The Independent Committee advises independent Sky shareholders to take no action in relation to the 21CF Offer.

Martin Gilbert, Chairman of the Independent Committee of Sky, said today:

"We consider the Comcast Offer to be an excellent outcome for Sky shareholders, and we are recommending it as it represents materially superior value. We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast Offer.

"On behalf of the Independent Committee of Sky, I wish to thank Jeremy and Andrew for their outstanding leadership of the business throughout the twenty-one month bid process and congratulate everyone at Sky on creating such a successful company that has attracted strategic interest from one of the world's greatest media companies."

Person making this notification

Chris Taylor, Company Secretary

Enquiries:

Analysts/Investors

Robert Kingston +44 (0) 20 7032 3726

Media

Gavin Davis +44 (0) 20 7032 7115

Morgan Stanley (Financial Adviser and Corporate Broker to Sky) +44 (0) 20 7425 8000 

Simon Smith, Laurence Hopkins, Anthony Zammit

Ben Grindley (Corporate Broking)

PJT Partners (Financial Adviser to Sky) +44 (0) 20 3650 1100

Simon Lyons, Scott Matlock, Jonathan Hall

Barclays (Financial Adviser and Corporate Broker to Sky) +44 (0) 20 7623 2323

Mark Astaire, Richard Taylor, Daniel Ross, Hugh Moran

Publication of this announcement

A copy of this announcement will be available, subject to certain restrictions in relation to persons resident in Restricted Jurisdictions, at www.skygroup.sky/corporate/investors/offers-for-sky by no later than 12 noon (London time) on 24th September 2018. A "Restricted Jurisdiction" is any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning either Offer is sent or made available to Sky shareholders or holders of Sky American Depositary Shares in that jurisdiction.

Neither the contents of Sky's website nor the contents of any website accessible from hyperlinks on Sky's website are incorporated into or form part of this announcement.

Important notices

Morgan Stanley & Co. International plc ("Morgan Stanley"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, is acting as financial adviser and corporate broker to Sky and no one else in connection with the matters set out in this announcement. In connection with such matters, Morgan Stanley, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in relation to the contents of this announcement or any other matter referred to herein.

PJT Partners (UK) Limited ("PJT Partners"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting for Sky and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Sky for providing the protections afforded to clients of PJT Partners nor for providing advice in relation to the matters set out in this announcement. Neither PJT Partners nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of PJT Partners in connection with this announcement, any statement contained herein or otherwise.

Barclays Bank PLC (acting through its Investment Bank) ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, is acting as financial adviser and corporate broker exclusively for Sky and no one else in connection with the matters referred to in this announcement and is not, and will not be, responsible to anyone other than Sky for providing the protections afforded to clients of Barclays nor for giving advice in connection with either Offer or any other matter referred to in this announcement.

Morgan Stanley, PJT Partners and Barclays have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.

Additional Information

This announcement is for information purposes only. This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction pursuant to either offer or otherwise, nor will there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. There can be no assurance that either offer will proceed in a timely manner or at all. This announcement does not constitute a prospectus or prospectus equivalent document.

The revised offer document and form of acceptance in respect of the Comcast Offer, which will contain the full terms and conditions of the Comcast Offer and details of how to accept, will be published on or before 27 September 2018. Any decision in respect of, or other response to, the Comcast Offer should be made only on the basis of the information contained in a revised offer ocument and the form of acceptance.

Sky shareholders are advised to read the formal documentation in relation to both the 21CF Offer and the Comcast Offer carefully once it has been dispatched.

The statements contained in this announcement are not to be construed as legal, business, financial or tax advice.

Information relating to Sky Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by Sky shareholders, persons with information rights and other relevant persons for the receipt of communications from Sky may be provided to Comcast and 21CF during the offer period as required under Section 4 of Appendix 4 of the City Code on Takeovers and Mergers (the "Takeover Code").

Overseas investors

The release, publication or distribution of this announcement in, into or from jurisdictions other than the United Kingdom may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of another jurisdiction should inform themselves about, and observe, any applicable restrictions and legal and regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to accept either Offer, or to execute and deliver a form of acceptance, or to vote their Sky shares with respect to a scheme of arrangement, or to execute and deliver forms of proxy appointing another to vote on a scheme of arrangement on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Sky shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with applicable restrictions and requirements may constitute a violation of the securities law of any such jurisdiction.

This announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England.

Unless otherwise determined by Comcast or 21CF (as applicable) or required by the Takeover Code, and permitted by applicable law and regulation, the Comcast Offer and the 21CF Offer respectively are not being, and will not be, made, directly or indirectly, in, into or from, or by the use of the mails or any other means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of, any Restricted Jurisdiction and neither Offer is or will be capable of acceptance by any such use, means, instrumentality or facility or from or within a Restricted Jurisdiction.

Accordingly, copies of this announcement and all documents relating to the Offers are not being, and must not be, directly or indirectly mailed, transmitted or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction. Any person (including, without limitation, custodians, nominees or trustees) who would, or otherwise intend to or who may have a contractual or legal obligation to, forward this announcement or any other document relating to either Offer to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements and must not mail, send or otherwise forward or distribute them in, into or from any Restricted Jurisdictions. Doing so may render invalid any purported acceptance of either Offer.

The availability of the Offers to Sky shareholders not resident in, or who are nationals or citizens or residents of jurisdictions other than, the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Any such person should inform themselves of, and observe, any applicable legal or regulatory requirements.

Notes to US investors

Sky is a public limited company incorporated in England. The Offers are being made to Sky shareholders resident in the United States in reliance on, and in compliance with, the applicable US tender offer rules under the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), including in the case of the Comcast Offer, Regulation 14E thereunder taking into account no action and exemptive relief granted by the US Securities and Exchange Commission (the "SEC"), in the case of the 21CF Offer, the rules and regulations promulgated thereunder and the "Tier II" exemption provided by Rule 14d-1(d) under the US Exchange Act, and in each case otherwise in accordance with the requirements of English law, the Takeover Code, the Panel, the London Stock Exchange and the Financial Conduct Authority. Accordingly, the Offers are subject to disclosure and other procedural requirements, including with respect to withdrawal rights, the offer timetables, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer law and practice. Some of the financial information, including financial information relating to Sky and the Sky group, including any included or referred to in the offer documentation, has been or will be prepared in accordance with international financial reporting standards and may therefore differ from, and not be comparable to, financial information of US companies or other companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

To the extent permissible under the Takeover Code and normal UK market practice, and, in the case of 21CF, subject to the surviving provisions of the co-operation agreement relating to the 21CF Offer, Comcast or 21CF and their respective affiliates or brokers (acting as agents for Comcast or 21CF or their respective affiliates, as applicable) may from time to time, and other than pursuant to the Offers, directly or indirectly, purchase, or arrange to purchase outside the United States, shares in Sky or any securities that are convertible into, exchangeable for or exercisable for such shares before or during the period in which their Offers remain open for acceptance, to the extent permitted by, and in compliance with, exemptive relief granted by the SEC from Rule 14e-5 under the US Exchange Act and in compliance with the Takeover Code. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Information about any such purchases or arrangements to purchase that is made public in accordance with English law and practice will be available to all investors (including in the United States) via the Regulatory News Service on www.londonstockexchange.com.

Either Offer, if consummated, may have consequences under US federal income tax and applicable US state and local, as well as non-US, tax laws for Sky shareholders and holders of Sky American Depositary Shares. Each Sky shareholder (including US shareholders, and holders of Sky American Depositary Shares) is advised to consult his or her independent professional adviser immediately regarding any acceptance of either Offer including, without limitation, to consider the tax consequences of accepting either Offer.

It may be difficult for US holders of Sky shares and Sky American Depositary Shares to enforce their rights, effect service of process within the US upon Sky and enforce any claim arising out of the US federal laws in connection with the Offers, since Sky is located in a non-US jurisdiction, and some of its officers and directors are residents of non-US jurisdictions. US holders of Sky shares and Sky American Depositary Shares may not be able to bring an action against a non-US company or its officers or directors in a non-US court for violations of US laws, including US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment. There is substantial doubt as to the enforceability in the UK of original actions, or of actions for the enforcement of judgments of US courts, based on civil liability provisions of US federal securities laws.

Neither the SEC nor any US state securities commission has approved or disapproved of either Offer, passed upon the merits or fairness or either Offer or passed upon the adequacy or accuracy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States.

Forward-looking statements

This announcement may contain certain forward-looking statements with respect to the businesses and operations of Sky, Comcast or 21CF and certain plans and objectives of Sky, Comcast or 21CF with respect thereto. All statements other than statements of historical fact included in this document may be forward-looking statements. Forward-looking statements also often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning.

Forward-looking statements (including those relating to the consummation of any offer and the anticipated benefits thereof) are often based on certain key assumptions and by their nature address matters that are, to different degrees, uncertain. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those expressed or implied in any such forward-looking statements. In addition to the information regarding these risks, uncertainties, assumptions and other factors set forth in the public filings made by Sky, Comcast and 21CF, important risk factors that may cause such a difference include, but are not limited to, (i) the completion of any offer on anticipated terms and timing, (ii) the ability to integrate the businesses successfully and to achieve anticipated benefits, (iii) the risk that disruptions from any offer will harm Sky's, Comcast's or 21CF's businesses, (iv) legislative, regulatory, economic, political and market developments and (v) changes in the global, political, economic, business and competitive environments, market and regulatory forces, and unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement. Sky, Comcast and 21CF disclaim any obligation to update any forward-looking or other statements contained in this announcement, except as required by applicable law.

No profit forecasts or estimates

No statement in, or referred to in, this announcement is intended as or shall be deemed a forecast, projection or estimate for any period. No statement in, or referred to in, this announcement should be interpreted to mean that earnings or earnings per share for Sky, Comcast or 21CF for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Sky, Comcast or 21CF, as applicable.

Rounding

Certain figures included in this announcement have been subject to rounding adjustments.

Time

All times shown in this announcement are London times, unless otherwise stated.