By Bloomberg
September 24, 2018

At a sprawling corporate campus nicknamed Skyberia in west London, Chief Executive Officer Jeremy Darroch gathered with Sky Plc’s top executives, the board and their advisers on Saturday to learn the British broadcaster’s fate.

Less than 10 miles away, Comcast Corp. CEO Brian Roberts marshaled his team at the Stafford, a luxury hotel near Buckingham Palace, and at the offices, around the corner in St. James Place, of boutique advisory firm Robey Warshaw.

Across the street sat Rupert Murdoch’s London flat, though the octogenarian billionaire and his son James chose to monitor proceedings from more than 3,000 miles away, in 21st Century Fox Inc.’s home of New York.

Around noon, on a gray and rainy English day, an almost unprecedented one-day auction began for control of Sky, culminating in a whopping $39 billion bid from Comcast (cmcsa) that knocked Fox (fox) out of the running. This account of the activity behind the scenes is based on interviews with people with knowledge of the events, who asked not to be identified as the matter is confidential. Representatives for Sky, Comcast and Fox declined to comment.

At stake was control of Sky — with 23 million customers across five European countries — as a potential weapon in warding off the rising competition from digital rivals such as Netflix Inc. Roberts would get to extend his cable empire beyond the U.S. while also adding sought-after programming such as rights to English Premier League soccer in the U.K.

While Murdoch was bidding against Comcast, it was Walt Disney Co. CEO Bob Iger effectively calling the shots. Disney (dis) is poised to acquire Fox’s existing 39% stake in Sky through its $71 billion purchase of most of the New York-based company, due to close next year. Iger inherited the bid for Sky — which he’s called a “crown jewel” — through that deal.

Fox turned in its first-round bid around midday, raising the price from 14 pounds a share. Sky had ended trading on Friday at 15.85 pounds — the highest in more than 18 years — giving the business a market value of about 27.3 billion pounds ($35.7 billion).

Fox’s Chief Financial Officer John Nallen, in London for the auction, was accompanied by Iger.

Bids Escalate

Around 3 p.m., Comcast responded by raising its offer, which had stood for months at 14.75 pounds apiece.

Both suitors’ electronic messages were sent to an encrypted site managed by the U.K.’s Takeover Panel, the merger supervisor founded half a century ago that sits in the shadows of St. Paul’s Cathedral. Each bid had to be verified over the phone through a secure, open line.

Back at Sky’s headquarters in Isleworth, Darroch, 56, and Sky Deputy Chairman Martin Gilbert and CFO Andrew Griffith, along with bankers from Morgan Stanley, PJT Partners Inc. and Barclays Plc as well as lawyers from Herbert Smith Freehills, had been holding vigil most of the day. As the afternoon gave way to evening, people wandered outside the boardroom to help themselves to a buffet of cooked beef, fish, cold cuts and salads. Some, unable to eat, stuck with drinking lots of coffee.

At about 6:30 p.m., shortly before sunset, the independent directors led by Gilbert, 63, gathered to discuss how they might respond to the anticipated final bids. The mood remained calm, with the prevailing feeling being that they hadn’t reached the end of the road yet.

As the clock approached 7 p.m., Comcast and Fox nervously submitted their final, sealed bids, with Philip Apostolides, co-founder of Robey Warshaw, pressing the button for the U.S. cable behemoth.

Minutes later, the takeover authorities posted a statement on their website. Comcast had delivered a knockout blow with a bid of 17.28 pounds a share, easily surpassing the 15.67 pounds offered by Fox.

Within minutes of the Takeover Panel issuing its statement, Roberts, 59, had called Gilbert to press for the board’s recommendation. Around the same time, Sky’s independent directors held a meeting, though reaching a consensus didn’t take long: They’ve recommended shareholders accept Comcast’s offer.

The mood remained relaxed at Isleworth, with the Sky team holding off on any immediate celebrations. (Investors have been more jubiliant, sending shares of the British broadcaster soaring another 9% to 17.24 pounds on Monday morning.)

Next Steps

Meanwhile, over at the Stafford, the mood among the Comcast executives — who were advised by bankers from Evercore Inc., Bank of America Corp. and Wells Fargo & Co. as well as Robey Warshaw — was more relieved than celebratory after a tense final hour. Handshakes and high fives were followed within 20 minutes by a conference call to plot the next steps.

Roberts is clearly taking no chances: The cable magnate is also poised to meet with Sky’s management and top investors in coming days. And Comcast is actively buying Sky shares on the open market, rather than waiting for the Oct. 11 results of the tender offer.

Back at Skyberia on Saturday evening, the headquarters had largely emptied out within an hour of the final verdict. At 8:35 p.m., Darroch sent an emailed note to his staff with the perhaps-wishful words, “It’s now over.”

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