21st Century Fox bid for Sky gets government approval

Ivan Schwartz
July 12, 2018

Rupert Murdoch's 21st Century Fox said it had agreed to buy Britain's Sky in a deal valuing the pay-TV group at $32.5 billion, trumping a rival offer from United States group Comcast.

Both Comcast (CCZ)and Fox see value in Sky as the media companies compete with the likes of Netflix and Amazon in Europe. At present, Disney appears to have the upper hand in the contest for Fox, stirring speculation that Comcast will redirect its firepower into snatching away Sky as a standalone acquisition.

The Government had been concerned over the impact that Fox's takeover of Sky could have on United Kingdom media, given that the Murdoch family also owns News Corp - the publisher of a raft of newspapers including The Sun and The Times.

Comcast tabled a proposal of £12.50 per share for Sky in February, and Sky's stock has traded consistently above the Comcast offer as investors anticipated Fox or Disney would come back with more. His new offer made on Wednesday, at £14.00 a share, once again won over Sky's independent directors who recommended the new £24.5bn deal. Of the assets he's seeking to acquire from Fox, Disney chief executive officer Bob Iger called Sky "a real crown jewel".

Under its plans to appease Government concerns, Fox has pledged to offload Sky News to Walt Disney, which is separately bidding to buy a major chunk of Fox assets - including the Sky stake.

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Of course, there's still time for Comcast to make yet another counteroffer, forcing Disney to increase its bid once more. Fox now owns 39 percent of the European company and has been angling to purchase the remaining 61 percent.

Fox said the performance of Sky since 2016 justified its new bid.

Following the announcement, Sky's share price was down 1.3 per cent at 14.81, though above the improved offer.

Should a deal for Fox's assets - including the 39% share of Sky - close before control of the satcaster is resolved, the winning bidder would be required to make an offer for the remaining 61% of Sky, according to United Kingdom takeover rules.

Other reports by GizPress

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