Takeover Panel orders auction to settle the battle for Sky

21 Sep 2018

The long-running battle for British broadcaster and telecoms provider Sky is seemingly set to end, after the Takeover Panel ruled that the company is to be auctioned off. In a press release regarding the matter, the Panel – an independent body which regulates bids for British listed companies – said that ‘in order to provide an orderly framework for the resolution of this competitive situation’, it had opted for an auction procedure after discussing the matter with all parties involved. In line with this, the auction will get underway today (21 September).

According to the auction rules there will be a maximum of three rounds of bidding, all of which will take place on 22 September 2018. In the first round, only the offeror with the lowest offer as at the start of the bidding will be allowed to make an increased bid, while in the second round only the offeror that was not eligible to make a bid in the first round may make an increased bid. 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 offerors may make an increased bid. A statement on the final bids is expected to be made at the end of the bidding day, while an eventual winner is expected to be confirmed by 24 September.

As previously reported by CommsUpdate, 21st Century Fox (21CF) was the first to make a bid for Sky back in December 2016, agreeing to pay GBP11.7 billion (USD14.6 billion) for the 61% stake it did not already own in the broadcaster; this deal valued Sky at around GBP19 billion. However, US pay-TV giant Comcast challenged that proposed deal with a GBP22 billion counterbid in February 2018. Subsequently, in June this year Matt Hancock, the UK’s Secretary of State for Digital, Culture, Media and Sport, published his conclusion that the proposed merger between Sky and Comcast did not raise public interest concerns, and said he would not intervene in relation to the deal. Meanwhile, having also considered the proposed acquisition of Sky by 21CF separately, the government also provisionally cleared this, though only on the proviso that Fox divest Sky News to Disney, or ‘an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years’.

United Kingdom, Comcast Corp (Xfinity, incl. Xfinity Mobile), Sky