Faced with a three-outcome scenario of coming away with just Sky, or buying Sky and Fox, or getting nothing at all, the latter is most likely, says New Street Research analyst Jonathan Chaplin.
“We value Comcast standalone at $56 [a share],” Chaplin said in a note to investors. “Investors may take some time to get over their frustrations with the bid for Sky, but they eventually will.”
A purchase of Sky and not Fox is the second most likely scenario and would result in a neutral valuation change, Chaplin said. Least likely is a scenario in which Comcast uses its purchase of the UK satellite TV company as a “stepping stone” to challenge the Walt Disney Company for 21st Century Fox.
“An acquisition of Sky and Fox is least likely and potentially the most dilutive scenario,” Chaplin wrote.
Analysts are still waiting for Comcast to formalize its $31 billion offer for Sky, which would trigger regulatory reviews in Brussels and the U.K. Comcast isn’t on the hook to do this until seven days before Sky shareholders vote on a rival offer from Fox, which is set to occur in late June.
“Comcast could still bid again for Fox if AT&T wins their case against the DOJ; a successful bid for Sky may improve their chances with Fox,” Chaplin said.
Should Sky holders reject Fox and approve Comcast, the U.S. cable giant would be looking at a regulatory review process of around 3 to 4 months. Approval, Chaplin predicted, would come “without much fuss.”