LONDON — U.S. media giant Comcast offered $30.7 billion Wednesday for Sky PLC, topping a bid from Rupert Murdoch’s 21st Century Fox and setting up a bidding war for Britain’s biggest satellite television company.
Comcast said it would pay 12.75 pounds for each Sky share, 16 percent more than Fox’s offer. Sky shares rose 3.9 percent to 13.59 pounds as investors bet Fox would sweeten its bid, and Sky withdrew its recommendation that shareholders accept the Fox offer.
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NEW YORK — Comcast is trying to refigure the traditional cable bundle, adding services such as Netflix to its subscription packages and offering internet-only TV streaming.
Comcast, the world’s largest cable company, and other cable operators are trying to work out new relationships with once fierce rivals in a changing media landscape.
Comcast and others have been trying to build a business that combine both the “pipes” – the internet services that connect everyone – and the producers of shows, movies, and other video.
Cable operators and internet service providers say this business model is key to their survival, given the inroads companies such as Google and Apple have made on their turf.
Comcast reported a strong first quarter Wednesday, boosted by $1.6 billion in ad revenue from NBC’s broadcast of the Super Bowl and the Olympics.
Philadelphia-based Comcast’s net income rose 21 percent to $3.12 billion, or 66 cents per share, from $2.57 billion, or 53 cents per share a year ago.
Excluding a one-time benefit from the federal tax overhaul and the gain on the sale of an asset, net income totaled 62 cents per share. That beat analyst estimates of 59 cents per share, according to FactSet.
Revenue rose 11 percent to $22.79 billion from $20.59 billion last year, edging past analyst expectations of $22.75 billion.
Comcast has been leading the way in marrying pipes with the entertainment that flows through them. It bought NBCUniversal’s cable channels and movie studio in 2013 and added Dreamworks Animation in 2016.
It has been tinkering with the traditional cable bundle, offering a la carte subscription services and so called “skinny bundles.” Earlier this month, Comcast said it will add Netflix to some cable bundles.
The Netflix move was an effort to offer customers more “choice, value and flexibility,” Sam Schwartz, chief business development officer at Comcast Cable said at the time.
Sky is based in London and has pay-TV operations across Europe, offering a platform for U.S. companies like Comcast and Fox to expand abroad. Fox, which already owns 39 percent of Sky, offered to buy the rest of the shares last June, triggering concerns that the deal would give Murdoch too much control over British media. Walt Disney Co., which is in the process of buying Fox, has signaled it would be interested in buying Sky to neutralize Murdoch’s critics.
“The question now is whether Fox/Disney makes a knockout bid to discourage any further Comcast offer and what it thinks this level is, without breaking the bank,” analysts at Liberum Capital said in a note to clients.
Fox issued a statement saying it remains committed to its offer and is “currently considering its options.”
Comcast CEO Brian Roberts said Sky’s 23 million customers and leading positions in the U.K., Italy and Germany would provide “significant opportunities for growth.”
But Comcast isn’t just wooing Sky shareholders. The company’s offer was also pitched at the regulators and public officials who have raised concerns about the Fox bid.
The company laid out a strategy that showed it was interested in being a good corporate citizen in Britain, promising to use Sky as a platform for growth in Europe, maintaining Sky’s U.K. headquarters and using the acquisition to “expand Comcast’s international footprint.”
“That is very important mood music to the takeover panel,” said Alice Enders, the head of research at Enders Analysis.
The company also said it would maintain the funding and independence of Sky’s news operation for at least 10 years and pledged that it wouldn’t buy any British newspapers for at least five years.
The regulator is conducting an investigation into whether Fox’s offer would give Murdoch and his family – who already own several other media titles in the U.K. – too much control over the country’s news media. Fox has proposed remedies to address those concerns, and the government will decide by the end of June whether they are enough.
“The important thing about the Comcast bid is that they appear to match the remedy that has been offered by Fox,” Enders said.
Comcast, which owns cable channels MSNBC and CNBC, argues that its approach would reduce concerns over media plurality because of its “minimal presence” in U.K. media.
Comcast’s offer comes just days before the May 1 deadline for the Competition and Markets Authority to give its final advice about the Fox bid to Culture Secretary Matt Hancock. He must decide to either approve or block Fox’s offer by the end of May.
This isn’t the first time Murdoch has faced obstacles in efforts to take full control of Sky. He withdrew a previous bid for Sky in 2012 amid fallout from the phone-hacking scandal, in which journalists at his newspapers gained illegal access to the voicemails of celebrities. Those revelations rocked Murdoch’s British newspaper arm and led to the closure of the 168-year-old News of the World.
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