Shares rocket as investors welcome Comcast’s £22 billion rival bid for Sky

The City cheered on Tuesday as US cable giant Comcast launched a shock £22 billion cash bid for the business built by Rupert Murdoch.

Sky shares rocketed 20% as investors welcomed the prospect of a takeover tussle. At £12.50 a share, that bid comfortably tops the £10.75 a share — or £18.5 billion — offer from Murdoch’s 21st Century Fox, a deal mired in regulatory hurdles and complicated by a bid from Disney for Fox.

Comcast chief executive Brian Roberts, son of company founder Ralph Roberts, told the Standard he has “liked Sky for a long time”.

“We admire the company. It is a marvellous business that is well run,” he said. Comcast wants to use Sky as a “platform for our growth in Europe”.

Though shares leapt 210p to 1315p, suggesting there is some hope of a counter-bid from Sky, many in the City welcomed the offer from Comcast, which owns a clutch of sports channels and DreamWorks Animation.

But Liberum analyst Ian Whittaker said: “We expect this deal to go through as we do not think Fox (or Disney, who are acquiring the Sky assets as part of their purchase of various Fox assets) will want to get into a bidding war.”

Of concern to UK watchdogs is the future of Sky News. Roberts pledged to back it, as Comcast has for NBC in the US. “We want to invest in it and leave journalists alone to do what they do,” he said. “We will be hands off the news.”

Comcast has structured the deal so that it need only get 50% plus one share, so in theory it could take control even if Murdoch insists on keeping his 39% stake.

Murdoch’s plan to sell Fox to Disney is seen as partly defensive — he is worried about the competitive threat from Netflix, Amazon and Facebook.

The Comcast/Sky deal faces the same scepticism. Jasper Lawler at London Capital Group said: “It could be argued Comcast is doubling-down on a dying format.