CMCSA stresses strong track record in Sky bid
Comcast this morning announced a bid of £12.50 per share for Sky, topping Fox's current offer of £10.75, a 16% premium. Management carefully crafted the call to show regulators that jobs would be maintained and investment increased while stressing to investors its past success in accelerating growth at acquisitions, namely at NBCU and AT&T Broadband. Sky will comprise ~12-13% of CMCSA EBITDA, the deal will be accretive to FCF in year one (and probably EPS ex purchase price amortisation considerations). CMCSA's 2018 cash return guidance remains unchanged but buying a $30bn company and taking leverage to 3x will require de-leverage at some point and impact future cash returns. The multiple equates to 12.2x CY18 Sky EBITDA or 11.3x after adjusting for the lower EPL right costs.Comcast is a media and technology company. The company's segments are: Cable Communications, which provides internet, video, voice, and security and automation services in the United States individually and as bundled services at a discounted rate over its cable distribution system to residential and business customers; NBCUniversal, which includes a portfolio of national cable networks that provide a variety of entertainment, news and information, and sports content, regional sports and news networks, international cable networks, and cable television studio production operations; and Sky, which owns a portfolio of pay television channels that provide entertainment, news, sports and movies.
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