Fox Publishes Formal Sky Offer Document

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Rupert Murdoch

Tuesday's move gives Fox and Walt Disney more time to consider whether to raise the Sky bid in a showdown with Comcast.

On Tuesday, 21st Century Fox published a formal offer document for shareholders of European pay TV giant Sky, detailing terms of its previously unveiled takeover bid at a price below an acquisition offer from Comcast.

Fox, which has agreed to sell a large group of businesses to Walt Disney, recently got regulatory clearance for the deal in the U.K. after a drawn-out process, but it has been going head-to-head for Sky with Comcast.

Tuesday's move gives Fox and Disney more time to consider whether to raise the Sky bid. It also makes it easier for Fox to get approval for a deal.

Fox confirmed Tuesday, as it had previously signaled, that it "intends to implement the acquisition by way of a takeover offer within the meaning of part 28 of the Companies Act 2006 rather than by means of a scheme of arrangement in accordance with Part 26 of the Act, which was the proposed structure of the acquisition prior to this announcement." That means Fox can use its existing shareholding in Sky to get to an approval threshold of as little as 50 percent, compared with 75 percent previously.

The change also brings the process behind Fox’s offer in line with Comcast’s. The process is similar to a U.S-style tender offer for shares of a company. Both Fox and Comcast now have 46 days, until Sept. 22, to change their offers.

Comcast had challenged Fox with a $30.7 billion offer, which Fox trumped with a $32.5 billion bid, or 14 pounds per share, before Comcast then sweetened its offer to $34 billion. 

The formal offer document is the latest step in the process and was due by Thursday, Aug. 9, under U.K. takeover rules to keep Fox in the running. It follows Comcast's recent publication of its own Sky offer document at the higher price. Fox highlighted that its deadline for publication of a potentially revised higher offer is Sept. 22 or a later date that Britain's Takeover Panel may set.

Fox, controlled by the Murdoch family, already owns a 39 percent stake in Sky. Fox has agreed to sell large parts of its business to Walt Disney for $71.3 billion. Comcast and Walt Disney had been in a showdown for those parts of Fox itself until Comcast bowed out of the bidding.