Fox battle for Sky could be resolved in a one-day auction

Roman Schwartz
September 23, 2018

21st Century Fox and Comcast hope to settle their struggle for Sky in an auction starting Friday after almost two years of competing for the London-based telecommunications company, but the situation may already be a win-win for Fox.

The Takeover Panel said the first round of the auction will take place on Saturday, with Fox firing the gun on proceedings, as it now has the lowest bid.

It comes after Comcast increased its offer for Sky to £26 billion in July, just hours after Fox hiked its bid for the 61% stake in the United Kingdom broadcaster that it does not already own to £24.5 billion. Disney warded off Comcast's attempt to buy the entertainment assets by securing a deal for $71 billion, including Fox's 39 percent stake in Sky. The lower bidder - now Fox would be able to bid during the first round, and Comcast would counter in the second.

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.

Sky is now valued at around $35 billion.

Such auctions are exceptionally rare and this will only be the fifth takeover to be decided in this way since the rules were changed in 2002.

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Sky was formed in 1990 when Murdoch merged his fledgling British satellite TV service with a rival, and is a broadcaster of sports, films and TV shows. The auction will formally begin at 5pm on Friday and conclude at the.

Should Comcast persuade a majority of Sky holders to tender, however, it could still end up with its battleground rival Fox - and eventually Disney - as the other major minority owner of the United Kingdom company.

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

Prior to the news, offers for Sky stood at $34 billion from Comcast CMCSA and $32.5 billion from Twenty-First Century Fox FOXA. 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.

No matter who wins the bidding war, Sky subscribers are likely to face higher prices, Ms Enders says. In this round, Fox and Comcast can make their offers contingent on the other making a new bid. The bidding war was complicated in July when Comcast dropped its bid to buy Fox assets, conceding defeat in a separate bidding war with Disney.

Fox has faced heavy scrutiny from the UK Government and competition watchdogs over its Sky takeover plans, while Comcast's bid was cleared by regulators early on in the process.

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