Rupert Murdoch’s 21st Century Fox has hiked its bid to take full control of Sky to £14 a share as it looks to beat rival suitor Comcast in the battle for the pay TV giant. It said the offer was around 12% higher than the £12.50 a-share bid submitted by US cable group Comcast.
Fox’s new offer for the 61% of Sky it does not already own values the company at £24.5 billion. Today BT share price gives it a capitalisation of £22.97 billion. Amazingly Sky with 30,000 employees, and a net income of £690m is worth more than BT with 106,000 employees and a net income of £1,900m.
The difference in valuation is stark with BT being valued at nine times earning and Sky at 28 times.
The difference in performance is also clear as BT stumbles from crisis to crisis. The restructuring strategy, announced by Gavin Patterson before he resigned/was sacked, includes 13,000 job cuts and a move out of BT’s central London headquarters. BT has also just signed a deal to help the Chinese firm Alibaba to challenge Amazon’s cloud dominance in Europe. The Chinese giant is looking to strengthen its position in Europe. This does rather feel like another problem for BT arriving rather than a great success developing.
Sky on the other hand have consistently and aggressively moved into new markets, opened up new customer segments and expanded their range of products and services.
Meanwhile, Fox has already agreed to sell most of its assets – including its current 39% stake in Sky – to Walt Disney. If Fox buys the remaining stake in Sky before completing the Disney deal, Disney would take full ownership of Sky when it closes its own takeover of the Fox assets.