Published: Sun, September 23, 2018
Economy | By

Sky Takeover: Comcast, Fox to Duke It Out in Weekend Auction

Sky Takeover: Comcast, Fox to Duke It Out in Weekend Auction

British regulators said Comcast and 21st Century Fox will battle for Sky through an auction.

The long-running bidding battle for Sky will be decided in a quick-fire auction finishing on Saturday night, Britain's Takeover Panel has announced.

The process will start if neither Comcast nor Fox has admitted defeat in the fight for Sky by 1700 London time (1600 GMT) on Friday, the Panel added.

It's rare for a United Kingdom takeover to be decided by auction but the process is created to produce final bids from each suitor that can then be evaluated by shareholders.

Fox has always been trying to acquire the 61 per cent of Sky it doesn't already own.

An auction is a rarely used process to settle a major takeover skirmish in the United Kingdom, but will become necessary if neither Fox nor Comcast submit a "best and final" offer for Sky by a September 22 deadline. Comcast made its first bid in April before upping its offer to $34 billion in July, topping 21st Century Fox's bid.


The fight for the company is part of a bigger battle being waged in the entertainment industry as the growth of Netflix and Amazon force the world's traditional media giants to spend tens of billions of dollars to keep pace.

In February, Sky Sports won the rights to UK Premier League TV packages, and Sky also licenses shows including Game of Thrones, as well as producing its own original content. (Walt Disney, however, has agreed to acquire a big portion of Fox for roughly $71 billion, including a stake in Sky.) Murdoch still has ambitions to boost his holdings in the United Kingdom media prize.

The last time the Panel invoked the procedure was in 2012 when it nearly intervened in the battle for Cove Energy until Royal Dutch Shell abandoned its takeover attempt and let Thailand's PTT Exploration & Production clinch a US$1.9 billion deal for the gas explorer just before an auction began.

Comcast now leads Fox in the fight with a 14.75 pound a share offer that values the broadcaster at 25.9 billion pounds ($34.2 billion) and has been recommended by the pay-television group's independent directors.

The panel's ruling sets the scene for an auction that begins at 5pm on Friday and ends the next evening, as all sides involved in the process agreed to waive usual procedure for a contest over five days from Monday - the first working day after the deadline. There can then be a third round, where both can slap in new offers, but if only one party puts in a third round bid, it will not be binding.

Both Fox and Comcast's bids for Sky have received regulatory approval from British and European authorities. It is conceivable, under the auction, that Fox and Comcast could come up bidding identical sums for Sky.

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