City advisers set for £580m payday as Sky battle comes to a close

MORE than half a billion pounds in fees for bankers, lawyers, accountants and public relations firms are at stake today as Comcast takes on 21st Century Fox and Disney in the final battle for Sky.

The bonanza ranks the dramatic 24hour auction of the pay-tv giant among the most lucrative takeovers ever for City advisers. According to offer documents already published by Comcast and Fox, which is backed in the auction by Disney, the two sides and Sky have agreed to pay a total of more than £580m between them, excluding VAT and other taxes.

Not all the fees will be paid, however. A proportion of the payouts to financial advisers, lawyers and public relations firms depends on who emerges as the new owner of Sky or on the discretion of the bidders.

Comcast’s financial advisers, led by the boutique Robey Warshaw, are in line for up to £38.7m if they secure a recommendation for their bid from Sky’s independent directors. Its lawyers, including the Magic Circle firm Freshfields, will get up to £24.1m, plus extra hourly charges.

Success will also mean public relations firms, led by Tulchan, will be paid up to £7.7m.

Fox’s bankers, led by Deutsche Bank, are due up to £38.4m if it wins the auction. Its lawyers, including Freshfields rival Allen & Overy, will get £20m. Brunswick, the public relations firm, is in line for most of an £8.1m fee if the Murdoch bid comes out on top.

Sky will pay the most for its financial advice. Morgan Stanley, PJT Partners and Barclays will share up to £61.5m, assuming one deal or another goes through. Lawyers including Herbert Smith Freehills will be paid up to £20m. Its public relations firm Finsbury will get a £5m payday at the end of a long relationship with Sky.

Many of the fees payable by Comcast and Fox are related to financing arrangements with banks and will be due regardless of which side wins. The auction officially began at 5pm yesterday and is due to run until the same time today. Fox is due to make the first bid as Comcast’s existing offer of £14.75 was the best on the table. Comcast will have a chance to respond before the two sides have the option of going head to head in a final round of blind bids.

Sky shares closed yesterday higher than Comcast’s existing bid at £15.85, valuing it at more than £27bn.