Published: Sat, September 22, 2018
Business | By Tara Barton

Sky takeover fight to be settled by rare auction

Sky takeover fight to be settled by rare auction

The U.K. Takeover Panel said Thursday the auction would consist of a maximum three rounds of bidding, starting Friday and ending Saturday, according to Dow Jones Newswires.

That compares to Fox's offer of £14 ($18.30) per share for the 61% of Sky it doesn't already own.

The process will start if neither Comcast nor Fox have admitted defeat in the fight for Sky by 5pm London time on Friday, the panel said.

Britain's takeover regulator has taken the rare step of settling the battle for European broadcaster Sky Plc through an auction procedure after competing bids from Comcast and Twenty-First Century Fox remained in place.

The world's biggest entertainment group Comcast now leads Fox in the fight with a £14.75 a share offer for control of Sky that values the broadcaster at £25.9 billion ($34.2 billion). With stiff opposition to the Fox bid in the U.K., Comcast entered the fray earlier this year, setting up a bidding war between two media heavyweights.

The bid was revived in December 2016, by which time News Corp had been broken up, leaving 21st Century Fox as one of its successors. Fox has offered £14 per share.

For Comcast, Sky offers a chance for growth - a company with proven quality in sports and entertainment together with the technology to deliver it.

Fox's bid for Sky is backed by Disney, which agreed in June to buy Fox's TV and film assets, including its existing Sky position, for about $71 billion.

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An auction for Sky, which broadcasts to 23 million households across Europe, would be the biggest ever deal in the United Kingdom to be decided by a panel-run auction.

The auction will bring to an end one of the UK's longest running takeover battles in history. Sky shares were little changed at 15.80 pounds at 2 p.m., giving the company a market value of 27 billion pounds ($35 billion).

If no clear victor has emerged at that point, with no increased bid being made in the second round, then there would be a third and final round in which both Fox and Comcast would be allowed to make increased bids.

In the second round only the other suitor, now Comcast, would be allowed to increase their offer. They would not be bidding blind and would know the outcome of the first round, a source with direct knowledge of the situation said.

If the second round draws a bid, the Panel will then run a third stage when both suitors will have the opportunity to sweeten their offers further in what would essentially be sealed bids. In this round, Fox and Comcast can make their offers contingent on the other making a new bid.

The battle for Sky is set to go to an auction, which will be settled Saturday.

Sky is the final prize in a competition between Comcast and Walt Disney Co. for the bulk of Rupert Murdoch's media empire.

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