What happened

Shares of Comcast (NASDAQ:CMCSA) fell as much as 6.8% in Tuesday's morning session, bouncing off that bottom near 11:20 a.m. EST. The cable TV giant has started a bidding war with Twenty-First Century Fox (NASDAQ:FOX) (NASDAQ:FOXA) over British broadcaster Sky Networks (NASDAQOTH: BSYBF), and investors are not exactly embracing the news.

So what

Fox has been attempting to buy out the 60% of Sky it doesn't already own since December 2016. Then Walt Disney (NYSE:DIS) came along and launched its own attempt to buy Fox -- very much counting on getting its hands on Sky in that $52 billion deal.

And here comes Comcast with a new bid for Sky, valuing the company 16% higher than the Fox offer did but settling for "50 per cent plus one share" of the U.K. broadcaster. This deal would value Sky at $31 billion and cost Comcast a cool $15.5 billion, all in cash. For the record, Comcast's balance sheet currently holds $3.4 billion of cash equivalents and $59 billion of long-term debt, so the company will need to dig up more cash either by grabbing additional debt or by selling some shares on the open market.

Man painting a wall mural of a large yellow fish chasing a smaller yellow fish.

Image source: Getty Images.

Now what

Adding Sky would expand Comcast's international share of revenue from 9% to 25%. The European network is profitable, diverse, and well-managed, and any company that completes a merger with it (at a reasonable price) will have reason to celebrate.

That being said, Comcast will either strain its balance sheet or dilute its current shareholders with this proposed deal. Furthermore, this surprise announcement raises more questions than it answers, and I have no idea what comes next. By the end of 2018, Sky might be a part of Comcast, maybe a division of Disney, or perhaps even a subsidiary of a stand-alone 21st Century Fox -- unless all of these proposals fail and Sky stands alone at several altars. And the final price could be very different from today's $31 billion valuation.

So it's not surprising to see Comcast shares falling on the news. If this deal ever closes, it could get quite expensive.