The £26 billion (€29 billion) battle for control of Sky, the European pay TV operator, between Rupert Murdoch’s 21st Century Fox and US cable group Comcast will be decided by an auction that will take place on Saturday.
The Takeover Panel, which regulates public dealmaking in the UK, laid out the rules on Thursday for the ultra-rare procedure that will mark the climax of a protracted fight for control of Sky that began in December 2016 when Fox bid £10.75 for the 61 per cent of the company it does not already own.
The panel said that since neither Comcast nor Fox has declared its latest proposal to purchase Sky as their best and final bid, the auction process would be used to determine a winner under the panel’s rules.
The companies, along with the Walt Disney Group, which has acquired the vast majority of Fox since its initial bid for Sky, have all agreed to an up-to-three-round process.
The panel said: “The auction procedure will consist of a maximum of three rounds which will all take place on September 22nd. In the first round, only the offerer with the lowest offer as at the commencement of the auction (or, in the event of both offers being at the same price, the last offerer to revise) may make an increased bid. In the second round, only the offerer that was not eligible to make a bid in the first round may make an increased bid (and it may do so even if no increased bid was made in the first round by the other offerer). If the auction procedure has not concluded after the second round (which it will if no increased bid is made in the second round), there will be a final round, in which both offerers may make an increased bid.”
Further increases
As it stands, Comcast has tabled a £14.75-a-share offer for Sky, while Fox has bid £14 a share. By mid-morning in London, Sky shares were trading at £15.81 in anticipation of further price increases by the two companies.
The fight has centred on a battle for Sky's 23 million subscribers, which Disney and Comcast hope to get hold of to boost their distribution, technology and content production at a time when the media landscape has been upended by the rise of Netflix and Amazon.
Only a very few panel-run auctions have been staged in the UK since 2000. Corus was sold to Tata by auction in 2008, while the sale of the Canary Wharf development was also decided through the procedure back in 2004. – Copyright The Financial Times Limited 2018
