Comcast’s bid to own U.K. pay TV operator Sky is moving along quickly.
After beating out Fox last month in a U.K. regulatory auction for Sky’s publicly traded shares, Comcast revealed in an SEC filing that it is on track to own more than 75% of Sky shares after buying Fox’s roughly 39% stake in the company.
Comcast said it will buy Fox’s shares either through a market purchase or through the Fox shares being tendered into its existing Sky offer.
In September, Comcast prevailed over Fox at auction with an offer price of £17.28 per Sky share, which sets an implied value of $40 billion (£30.6 billion) for the fully diluted share capital of Sky. Shortly after, Fox said that it intended to sell off its stake in Sky to Comcast. Comcast’s offer for Sky values Fox’s stake at £11.6 billion (or more than $15 billion).
“In light of the premium Comcast has agreed to pay for Sky, we and Disney have decided to sell 21CF's existing 39% holding in Sky to Comcast,” said Fox in a statement. “We congratulate Comcast on their pending acquisition. We are proud of the role our company has played in building Sky, and of the outstanding value we have delivered for shareholders of 21CF and Sky, and customers across Europe.”
Comcast is buying Sky’s more than 23 million European subscribers as well as Sky’s entertainment assets.
As Comcast, Fox and Sky work out the details, Disney—which is acquiring a major portion of Fox in a $71.3 billion transaction—is already making plans for the presumed merger cost savings it will incur by not acquiring Sky. Disney said those savings—coupled with the money made through the Justice Department-mandated sale of Fox’s 22 regional sports networks—will be funneled back into Disney’s direct-to-consumer product efforts.
“Along with the net proceeds from the divestiture of the RSNs, the sale of Fox’s Sky holdings will substantially reduce the cost of our overall acquisition and allow us to aggressively invest in building and creating high-quality content for our direct-to-consumer platforms to meet the growing demands of viewers,” said Bob Iger, chairman and CEO of Disney, in a statement.