Even though most observers still see the 21st Century Fox bid for the 61 per cent of Sky that it does not already control being approved by the UK’s media secretary (and following the deal’s assessment by the Competition & Markets Authority) the market clearly has the jitters.
The proof, as a November 15th report from investment bank Exane/BNPP suggests, is the bid discount now apparent on the London Stock Exchange. Sky’s share price is 16.3 per cent below (at 900p) the official bid price.
The bank’s report says: “We see two instances in which the bid could be blocked by the Culture Secretary:
i) the UK government falling and replaced with an openly hostile Corbyn-led administration or
ii) further scandals break at NewsCorp or 21st Century Fox (most notably any that were to implicate the 21st Century board of directors).
The bank adds that with interest from Disney, and that even with a successful Disney bid for some of 21st Century’s key assets, including Sky, it is unlikely that Disney would remove Sky from its key acquisitions. “There is no certainty Disney could withdraw the offer under Takeover panel rules,” says the bank’s report.
The market’s uncertainty seems focused on Rupert Murdoch’s apparent change of heart, and contemplating a shift in focus to more attention on Sports and News.
Disney, according to a recent detailed report on CNBC, is interested in 21st Century’s movie studio, its TV and international assets such as India’s Star and Sky Europe, plus Nat-Geo and FX.