LONDON • Sky shares leapt to an 18-year high yesterday as investors bet a transatlantic battle for the European pay-TV group had further to run, after Comcast's US$34 billion (S$46 billion) bid trumped an offer from media mogul Rupert Murdoch made just hours earlier.
Comcast, the world's biggest entertainment group, said on Wednesday it had the backing of Sky's independent directors for a £14.75 -per-share offer that came just 16 hours after Mr Murdoch's 21st Century Fox bid £14.
The speed with which Comcast's Brian Roberts counter-bid showed how determined he was to buy Britain's Sky, which broadcasts sports, films and TV shows to 23 million homes across Europe.
Sky's shares rose to as high as £15.41, valuing it at £26.4 billion (S$47.6 billion) as investors bet the bidders would have to pay more to secure victory.
"This thing has gone from £10 to £15 in seconds, so most people have got vertigo on this one," said a top 20 Sky shareholder Crispin Odey. Sky's shares are up 95 per cent since Fox made its first bid in 2016, and have risen 55 per cent in the last year.
The fight is part of a bigger battle being waged in the entertainment industry as the rapid growth of Netflix and Amazon forces the world's traditional media giants to spend tens of billions of dollars to keep pace.
Comcast and Walt Disney are locked in a separate US$70 billion-plus battle to buy most of Fox's assets, which would include Sky, and Disney is backing Mr Murdoch in his pursuit of the British company.
Mr Murdoch already owns 39 per cent of Sky, which he helped to launch. The stand-off pits the industry's biggest names against each other, with Mr Roberts, the Murdoch family and Disney's Bob Iger engaged in a multibillion-dollar game of chess to reshape the global entertainment business.
Analysts are divided as to who will emerge triumphant.
Mr Jeff Wlodarczak at Pivotal Research Group said Comcast may succeed in winning Sky but lose out on Fox to Disney.
Mr Richard Greenfield at BTIG said, however, he thought Disney needed to buy Sky to secure a direct relationship with customers in Europe so it could sell them its vast range of programming.
"Is Disney willing to let Sky go? Or will they crush Comcast on both continents?" Mr Greenfield said.
"We continue to believe that if Comcast really wants to own Sky, their best way to do it is by acquiring the Fox assets - winner takes all was always the scenario that appeared most likely to us."
Shareholders in Fox will vote on Disney's US$71 billion bid on July 27.
Comcast, which made a US$65 billion all-cash offer for the Fox assets last month, only for Disney to raise its bid, would need to return before that date if it is to give investors enough time to consider its bid.