Britain’s Takeover Panel, which regulates acquisitions, on Friday ruled that Walt Disney would have to pay a minimum price of 14 pounds ($18.37) per share for European pay TV giant Sky in the wake of its sweetened bid for 21st Century Fox worth $71.3 billion.
Meanwhile, Comcast on Friday published, as required by the end of the day under U.K. deal procedures, its formal offer document to shareholders of Sky, detailing terms of its previously unveiled bid and how they can accept it.
The developments are the latest in the long-running saga of Sky’s expected takeover. In December 2016, Fox, which owns a 39 percent stake in Sky, offered 10.75 pounds per share to acquire the remaining 61 percent. U.S. cable giant Comcast earlier this year made a rival 12.50 pounds per-share bid for all of Sky. Both this week raised their offers: first, Fox boosted its offer to 14 pounds per share, Comcast then trumped that with a bid of 14.75 pounds per share.
At the same time, Disney and Comcast have been looking to acquire many of Fox’s assets, including its Sky stake. Disney on June 20 raised its Fox offer to $38 per share, or $71.3 billion, trumping Comcast’s $35 per share, or $65 billion, cash offer.
Britain’s Takeover Panel then said it would examine the implications of the increased Fox bid for Sky.
On Friday, it ruled that Disney would have to bid for all of Sky with an offer of at least 14 pounds per share if it manages to acquire the entertainment assets of Fox before the current bidding showdown for Sky between Fox and Comcast wraps up. The price is below Comcast’s most recent offer and on par with Fox’s latest bid, so the ruling doesn’t seem to have any immediate impact on current bids.
In April, the panel had ruled that under its so-called “chain principle,” Disney would have to offer to buy all of Sky if it acquires Fox’s 39 percent stake in the company, if neither Fox, nor Comcast succeed with their Sky offers.
Analysts had said that if the Takeover Panel decides that Disney must make a mandatory offer for Sky that is higher than 10.75 pounds per share following its increased Fox bid, it would essentially set a new floor price for Sky, which the panel on Friday confirmed.
“The Executive has determined this price by analyzing, among other matters, the relative contribution of Fox’s stake in Sky in the valuation work carried out by Disney’s financial advisers to support the fairness opinion prepared for the Disney board in June 2018 and by taking into account the increased offer announced by Fox, with the agreement of Disney, for Sky on July 11,” the Takeover Board said.
Sky has informed the panel that “it intends to request that [its] hearings committee be convened in order to review this ruling,” the Takeover Panel added. “Each of Disney and Fox is considering its position.”
The offer document Comcast published on Friday, meanwhile, highlighted that an independent committee of Sky’s board currently supports the Comcast bid and emphasized that shareholders have until Aug. 22 to accept the bid.
Fox is widely expected to come in with a sweetened offer in the near future though, meaning shareholders will in many cases wait for where the price goes.
“The offer represents a significant increase in value relative to the original offer and the 21st Century Fox offer,” Sky reiterated in the offer document published on Friday.
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