I likened the battle between Comcast and Disney over Rupert Murdoch’s 21st Century Fox and Sky to a soap opera yesterday.
With the speed at which it’s moving it’s starting to look more like a thriller, with the action scenes being filmed on this side of the Atlantic.
Shortly after Fox raised its bid for Sky to £24.5bn in an attempt to see off Comcast and consolidate its proposed marriage with Disney (Sky is supposed to be part of the dowry), Comcast upped the ante with a £26bn offer.
Priced at £14.75 per share in cash, it may not be the end. Analysts at broker Jeffries stirred the pot with a note suggesting neither bid amounted to a knock out. It has raised its calculation of the company’s “fair” value to £17.50, or just over £30bn.
The price the shares are changing hands at on the open market – just under £15.50 – indicates an expectation that there will be more to come from the battling bidders.
It also suggests that Comcast taking Sky and leaving the rest of Fox, for which it has also tabled an offer, to Disney, a potential outcome I posited yesterday, is an increasingly realistic scenario.
If Comcast boss Brian Roberts’ core ambition is internationalising his business to deal with the slowing US media market, the European powerhouse that is Sky is quite a prize.
Fair value for the business is whatever Mr Roberts, or Mr Murdoch, or Disney boss Bob Iger, is prepared to pay for it.
Here’s why our thriller is, potentially, one of those dark ones the Scandinavians are so good at producing.
Conservative ministers will point to the Sky situation and say “look, look, what a super big investment in Britain these Americans are planning!”.
But when people make an investment of that size they need to make a return.
Even all but unsackable CEOs have shareholders to answer to and egos that tend to get bruised when the business media trashes them because their companies are failing to cut the mustard as regards returns.
The more Mr Roberts, or Mr Murdoch (and thus Mr Iger) invests in Sky’s shareholders, the more they will have to squeeze the business to make that return.
It could be through jobs cuts, it could be through price rises to Sky customers. As likely as not, both will be in the script.
As my colleague Ben Chu noted back in February, Comcast is one of the most complained about firms by consumers in the US.
The interests of consumers in this country have scarcely merited a mention as this has played out.
It’s usually held that free market capitalism as it is currently constituted is good for consumer. If we’d just leave it to the market all will be well!
This is an example of where that argument could fall flat on its face, particularly if regulators do what they have a habit of doing in Britain and close their eyes as the prices start rising.
Thrilling takeover tussle this is indeed, but like the best of Scandi Noir, the ending is unlikely to be a happy one.