Murdoch Ups Takeover Offer For Sky
The Murdoch family’s 21st Century Fox has, as widely forecast, lifted its offer for the 61% of UK based pay-TV group Sky PLC that it doesn’t already own to £24.5 billion ($US32.5 billion) and topping an existing bid from Comcast Corp (worth $US31 billion).
Fox said it agreed to pay £14 per share to acquire Sky, a significant premium to the £10.75 per share offer it made in December 2016.
The offer was recommended by independent committee of Sky board members, saying the Fox offer “represents a substantial increase in value relative to the Comcast offer”.
Fox agreed on June 20 to sell most of its assets—including its current 39% stake in Sky—to Walt Disney Co.
If Fox buys the remaining stake in Sky prior to closing the Disney deal, Disney would take full-ownership of the British company upon completion of the larger transaction. The Disney offer challenged a prior, unsolicited bid from Comcast for Fox assets, separate from the US cable giant’s pursuit of Sky.
Fox’s move comes before a final decision by the U.K. government’s Department for Digital, Culture, Media and Sport as to whether or not the company will be allowed to continue its bid for Sky, which is expected by tonight, July 12 London time.
A change in ministers in this week’s cabinet reshuffle in London could delay the final approval though. Culture and Media Minister Matt Hancock was moved to another portfolio and replaced by former Attorney General Jeremy Wright who has no background in the media portfolio.
Under Fox’s latest proposal it will sell Sky News to Disney, and provide a Disney-owned Sky News channel with funding of at least 100 million pounds a year for 15 years. This would meet regulators' criteria to approve the deal, former Culture Secretary Matt Hancock said last month.
The U.K. government previously delayed the Fox bid (first made in December, 2016) on media-plurality grounds, citing concerns that it would give the Murdoch family too much influence. The Murdoch family (through the Murdoch Family Trust) owns a 39% stake in both Fox and in News Corp, which publishes three UK newspapers and is the parent company of Dow Jones.
Comcast said on June 15 that it planned to post an offer document to Sky shareholders, after receiving approvals from both UK and EU regulators. That is supposed to happen by tomorrow (Friday).
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.