Sky's share price flew up almost nine per cent in early morning trading as it urged investors to accept Comcast’s £30.6bn takeover offer immediately, calling it “an excellent outcome for independent Sky shareholders”.
The company’s independent committee backed the offer unanimously this morning, following a bidding war between billionaire Rupert Murdoch’s 21st Century Fox and Comcast.
Three rounds of bidding between the rivals resulted in Comcast tabling a winning 1,728p per share offer in a closed auction process on Saturday, beating Fox’s 1,567p offer. This morning's jump in share price saw Sky stock get nearer to Comcast's valuation, at 1,722p per share.
“Sky shareholders have benefited from seven months of competitive tension which has ultimately led to an auction process that has successfully concluded with the second increased offer from Comcast,” Sky’s committee said in an update to investors this morning.
“It is in the best interests of all Sky shareholders to accept the second increased offer. Given the possibility of a delisting of Sky in the near future, [Sky] urges shareholders to accept immediately.”
Comcast becomes the world’s biggest paid-for TV operator with the acquisition of Sky, bringing its global audience to around 52m people.
In contrast, the media giant's shares suffered their worst day in nine years, falling over seven per cent as investors feared it had overpaid.
It is expected to use Sky’s assets to generate TV streaming services once the deal completes before the end of October.
The offer represents a 10-year return of +402 per cent for Sky shareholders, compared to the FTSE 100 return over the same period of +97 per cent.