LONDON (Reuters) - U.S. group Comcast stepped up its push to buy European pay-TV group Sky on Tuesday, seeking regulatory and political approval even as it maneuvers for a broader deal with bid rival, Rupert Murdoch’s Fox.
Comcast, the world’s biggest entertainment company, set out its plans to keep Sky’s news output independent and fully funded for 10 years to address any political concerns that a takeover could damage Britain’s news market.
Its formal notification to the European Commission of its intention to buy Sky also put it on a similar regulatory timetable to Fox, despite entering the race 14 months later, with verdicts on both bids due next month.
Comcast is keen to prove to Sky’s shareholders that it will face fewer regulatory hurdles in its $30 billion pursuit of Sky than Murdoch’s Fox which has faced repeated delays in its bid to buy the 61 percent of Sky it does not already own.
On Monday the bid battle, which already involves three of the world’s biggest media companies after Disney agreed to buy some Fox assets including Sky, took a further twist when Reuters reported that Comcast is seeking to disrupt the broader Fox-Disney deal by preparing its own counter bid.
According to three people familiar with the matter, Comcast is asking investment banks to increase a bridge financing facility by as much as $60 billion so it can make an all-cash offer for the media assets that Twenty-First Century Fox Inc has agreed to sell to Walt Disney Co.
“As these big groups look to fight off the threat from the likes of Netflix and Amazon then scale becomes more and more important and you need scale and distribution,” Numis media analyst Paul Richards said.
“You can see why the Fox assets are so important and Sky is rolled in with that.”
Sky is a British-based European pay-TV group that offers services in Britain, Ireland, Germany, Austria and Italy.
It agreed to be sold to its founder and 39-percent owner Fox in December 2016 but regulators and politicians have repeatedly intervened over concerns that the newspaper-owning Murdoch will have too much influence in Britain.
With Fox focused on getting approval, Comcast made its own shock bid for Sky in February, promising an easier approval process and a higher offer. It made its bid formal last month, and on Monday it notified the European Commission and will get an initial verdict on June 15.
On Tuesday it said it had agreed legally binding guarantees with Sky to fund its award-winning news output and to create a board to oversee its independence.
“The Sky News Binding Commitments will constitute legally binding commitments on Comcast and Sky which will be enforceable by the Sky News Board,” Comcast said in a statement.
Murdoch’s Fox has set out its own undertakings to protect the funding and independence of Sky News and is waiting to hear from Britain’s media secretary on whether Fox should be allowed to buy Sky. The government will give its verdict on that offer on June 13.
Reporting by Kate Holton; Editing by Keith Weir