Comcast Corp (NASDAQ: CMCSA), the cable company, formally submitted its US$31bln bid to buy the television channel Sky and also reported robust first-quarter profits – despite seeing a slowdown in cable TV subscribers.
Comcast’s £12.50 per share all-cash bid for Sky throws up a direct challenge to a competing offer from Rupert Murdoch’s Twenty-First Century Fox Inc. (NASDAQ:FA]=OXA), which owns 39% of Sky.
Indeed, Comcast’s offer is 16% higher than Fox’s £10.75 per share offer and Sky’s independent board members are welcoming the Comcast bid and are scrapping their recommendation that shareholders should accept the Fox deal.
In pre-market trade, Comcast shares inched down 2.6% to US$32.50.
Zeroing in on its first-quarter earnings, Comcast surpassed the expectations of analysts by posting US$0.62 per share with revenue of US$22.8bn. Analysts had expected the cable group to earn US$0.59 per share on revenue of US$22.7bn.
In the quarter, the group won another 379,000 customers for its wireless internet service and its subsidiary NBC Universal’s showing of the Olympics in South Korea and the Super Bowl drove its TV business.
The performance of NBC Universal, which owns CNBC, NBC news as well as film studios and theme parks, was a bright spot in the quarter as the group earned US$9.53bln.
Comcast shed 96,000 video subscribers in the quarter ending March 31, outpacing the expectations of analysts who had expected the group to lose just 75,000 subscribers.