Comcast's cute timing has tangled Rupert Murdoch's Sky plans

Poor old Rupert Murdoch. A media titan can’t even break up his own empire these days without gatecrashers turning up to spoil the show. Comcast’s £22bn bid for Sky is bold, aggressive and cutely timed – qualities associated with Murdoch in his pomp – and, very probably, marks the start of a shootout for the UK satellite broadcaster.

The open question is who will to go head to head with Comcast. Should it be Murdoch’s 21st Century Fox, whose current £10.75-a-share cash offer for Sky has been trumped by 16% by Comcast? Or should Disney, in the process of trying to buy the bulk of Fox via a deal that includes the 39% stake in Sky, take matters into its own hands and make a direct counter-offer?

Therein lies the cleverness of Comcast’s timing. Brian Roberts, the chairman and chief executive, has a decent chance of exploiting the confusion in the opposition camps. Does Fox, given the importance of the Disney deal, have a completely free hand to raise debt and get into a bidding war for Sky? And does Disney, whatever it says about Sky being a “crown jewel”, really regard the UK TV company as fundamental to its wider purchase of Fox assets in the US?

The very worst outcome for Murdoch would be to lose to Comcast in the battle for Sky and then see his Disney deal scuppered by US regulators, which is still a possibility. In that case, as Jefferies analysts put it, Fox would be left as “a subscale collection of mainly US assets with India as the only material international exposure”.

Put another way, in that scenario Murdoch would have been outmanoeuvred in the current frenzy of deal-making in the international media industry. It is why he is highly unlikely to shrug his shoulders and just accept Comcast’s cash for Fox’s current 39% stake in Sky. He will want to stay in this fight.

For Sky’s non-Murdoch shareholders, life is working out splendidly. Comcast, as a $184bn US cable giant, is plainly a serious bidder with little regulatory baggage. Critically, it would even be prepared to have majority control of Sky with Fox or Disney as a co-traveller – it has set the threshold for acceptances at just 50.1%. In the stock market, Sky’s shares shot up to £13.30 on Tuesday morning, anticipating that the bidding will go higher than Comcast’s £12.50 offer.

Wind the clock back and shares in Sky, amid worries about competition from Netflix, had slumped to 750p before Fox pounced in December 2016. The long, winding and still-unresolved UK regulatory process has not helped Murdoch’s cause, but he knew the risks. Events happen. Perceptions of Sky’s value have also been boosted by a successful renewal of Premier League rights at a lower price than last time.

Everything now points to an almighty two- or three-way scrap for Sky. This cannot be the ending Murdoch expected. He assumed Fox’s 39% stake in Sky meant he was the only possible bidder. He was wrong.

Provident taken to the cleaners

The directors of Provident Financial, a high-interest-rate lender to “non-standard” borrowers, now know how it feels to be taken to the cleaners.

Their company is paying £31m in underwriting and advisers’ fees to get a £331m rights issue out of the blocks. Given that the new shares will be issued at 315p, versus a share price that shot up 70% to £10, the underwriting risk is negligible. Investment bankers win again.

Provident can have no complaints, however, about the £169m it will pay in compensation to credit card borrowers in cases where the full price of an add-on product, called a repayment option plan, was not disclosed.

For official purposes, the bulk of the sum is being returned voluntarily since it relates to events before 2014, which is when the Financial Conduct Authority took over regulation of consumer credit. In practice, the company had little choice. It was in a hole and the FCA could dictate the price of extraction: full redress for customers, a stronger balance sheet, and a board spouting lines about the need “to rebuild trust with our customers, regulators, shareholders and employees”.

The last reference is to Provident’s botched shakeup of its doorstep lending division, the other factor behind profit warnings that have seen the shares crash from £32 last spring. If the new management can avoid similar calamities, which shouldn’t be too hard, Provident clearly has a future. And the FCA is right to let it have a go. Some of the interest rates Provident charges aren’t pretty – but there are uglier operators out there, not of all of whom respond to a regulatory whip.