Fox tops Comcast Sky bid
July 11, 2018
By Colin Mann
21st Century Fox has increased its bid to buy the 61 per cent of Sky it does not already own in a deal that values the broadcaster at $32.5 billion, passing that of rival Comcast, which is likely to make its own revised offer later in the week.
A Statement from 21CF and the Independent Committee of Sky said that they have reached agreement on an increased recommended pre-conditional cash offer for the fully diluted share capital of Sky which 21CF and its Affiliates do not already own at a price of £14.00 for each Sky Share.
The price of £14.00 per Sky share represents:
- a premium of approximately 82.1 per cent to the Closing Price of £7.69 per Sky Share on December 6th 2016, being the last Business Day before the date on which an initial proposal was received from 21CF by Sky;
- an increase of approximately 30.2 per cent to the the Original 21CF Offer price of £10.75 per Sky Share;
- an increase of approximately 12.0 per cent to the Comcast Corporation Offer price of £12.50 per Sky Share announced on April 25th 2018
“As the founding shareholder of Sky, we have remained deeply committed to bringing these two organisations together to create a world-class business positioned to deliver the very best entertainment experiences well into the future,” said Fox, adding that it strongly believed that a combined 21CF and Sky would be a powerful driver for the continued growth and vibrancy of the UK and broader global creative industries. “The enhanced scale and capabilities of the combination will enrich Sky’s ability to continue on its mission for years to come, especially at a time of dynamic change in our industry,” it stated.
“This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world, but none of whom have demonstrated the same local depth of investment and commitment to the UK and to Europe,” it suggested.
“We said when we announced our proposed acquisition of Sky that we were firmly committed to UK’s creative industries and the contribution they make to the UK economy. We remain committed to the UK and believe that our offer for Sky will bring the best value for all the company’s stakeholders and are delighted that the Independent Board of Sky has recommended our offer to its shareholders.”
The acquisition remains subject to one outstanding precondition, being the approval of the UK Secretary of State for Digital, Cuture, Media and Sport. On July 10th 2018, the Secretary of State stated that he intended to announce his final decisions by July 12th 2018.
21CF currently anticipates that the Acquisition will complete in the third calendar quarter of 2018.
On June 20th 2018, 21CF and Disney and certain of Disney’s wholly-owned subsidiaries entered into an amended and restated merger agreement, pursuant to which Disney has agreed to acquire for a price of $38.00 per 21CF share, subject to certain adjustments, the same businesses Disney agreed to acquire under the previously announced merger agreement between 21CF and Disney.
The Disney Transaction is subject to certain conditions precedent, including regulatory and shareholder approval, and is expected to complete within six to 12 months after June 20th 2018. Completion of the Sky acquisition is not a condition to completion of the Disney Transaction. Completion of the Sky acquisition will not affect the amount or form of consideration that stockholders of 21CF receive in the Disney Transaction.
Technology, media and telco analyst Paolo Pescatore, described the increased offer as “a clear statement of intent” which underlines the strategic importance of owning Sky to both companies. “The love triangle takes a new twist. There’s no way that Disney, nor 21st Century Fox want to let Sky go to Comcast. Therefore expect another round of counter bids. The price is heading in one direction. It’s a great time to be a Sky shareholder,” he noted.
More to follow …