Government Clearance Given for Rupert Murdoch’s Fox to Bid for Sky
Government clearance has finally been given today for Rupert Murdoch’s Twenty-First Century Fox to bid against Comcast (NASDAQ:CMCSA) for the takeover of Sky (LON:SKY). The feud for Europe’s largest media and pay-tv broadcaster has been going on for a number of years now, the news being dominated by Comcast and Fox. Currently, the bid by Comcast stands at £26bn.
Jeremy Wright, culture secretary in the UK, has cleared Rupert Murdoch saying “It is now a matter for the Sky shareholders to decide whether to accept 21st Century Fox’s bid.” This was following 19 months of deliberation.
Bidding War and Sky Takeover Outcomes
The bidding war, even during deliberation has intensified. Initially, Fox offered just £18.5 billion in December of 2016. Comcast, who have a large interest in the broadcaster, offered £22bn earlier this year. Fox has countered this yesterday, only for Comcast to further increase it’s offer today.
Rupert Murdoch’s Fox currently owns 39% of Sky, with the bidding being for the remaining 61%. Should Fox be the eventual winner, it has been stated that the news sector of the company, Sky News, must be sold to a rival. In addition, for fifteen years any shortfall of funding must be met by Fox, keeping the budget at £100 million.
One of the mentioned forerunners mentioned for the sale of Sky News is Walt Disney (NYSE:DIS). Disney has also shown a large interest and, late last year reached an agreement to purchase the bulk of Twenty-First Century Fox’s media empire – which includes its 39% stake in Sky.
Comcast was also involved, competing with Disney for the purchase of Fox. Of course, this deal still has find it’s way through regulators in the US. Disney are, understandably, backing Murdoch in his aim to acquire the remaining stock of Sky.
The Future’s Bright for Sky
One thing that is certain is that this bidding war has proven extremely valuable for all Sky shareholders. At the beginning of the week, shares in Sky were valued at £14.58 and have closed four days later at £15.45. This has surpassed the current highest offer by Comcast at £14.75 per share.
One thing is certain, the face of media and broadcasting in Europe will change as either Fox or Comcast will likely find themselves the owners of Sky, in a deal that has raised in price dramatically, to say the least.