Fox in final chapter of Sky battle with Comcast
Its formal offer triggers deadline for revised bids
BENGALURU: Twenty-First Century Fox Inc has triggered a 46-day deadline to raise its bid for Sky in a battle with Comcast for control of the British pay-TV group.
Under British takeover rules, Rupert Murdoch’s Fox now has until Sept 22 to trump Comcast’s £14.75 per share offer for Sky, which values the broadcaster £25.9bil (US$33bil), after it formalised its own £14 per share bid.
Comcast gatecrashed Fox’s attempt to buy the 61 % of Sky that it does not already own earlier this year and the US cable giant’s latest, higher offer, which it submitted in July, has been recommended to shareholders by the broadcaster’s independent directors.
Fox posted its formal offer document, without improving its price, on Tuesday, setting in motion a timetable to end the uncertainty over Sky’s future by triggering a 46-day period during which both Fox and Comcast can lift their offers.
If the situation is not resolved by then, Britain’s Takeover Panel can run an auction to bring the complex and long-winded transatlantic takeover battle for Sky to an end.
However, Fox may opt to walk away from the Sky deal rather than taking on Comcast, people familiar with the matter said.
Sky shares were up 1% at £15.355 yesterday, signalling that investors expect the bidding war to continue.
In the document, Fox said it was switching from a scheme of arrangement to an offer.
That means it can choose to lower its acceptance threshold from 75% of Sky’s minority shareholders to a simple majority of all the broadcaster’s shares, including its own 39% stake.
“Flipping to an offer affords Fox more flexibility should they wish to come back with a higher number,” analysts at Olivetree
Financial said.”
A scheme is cumbersome as you would constantly need to co-ordinate your actions and intentions with the Sky board.” Fox also said it expects to pay its advisers, which include Deutsche Bank, Goldman Sachs and Centerview Partners, about £242mil if its Sky bid succeeds.
Since submitting its first £10.75 per share bid for Sky in December 2016, Fox has agreed to sell the bulk of its TV and film assets, including its Sky stake, to Walt Disney.
Comcast had been vying with Disney for the Fox assets but last month dropped its pursuit to focus on buying Sky.
In a separate announcement, Sky acknowledged Fox’s offer document and said its independent committee would respond to the offer within 14 days.