Takeover of UK broadcaster still waiting on regulator approval
Murdoch's Fox in new £24.5 billion Sky bid
The two-year-long takeover tug of war for Sky ramped up another level when Rupert Murdoch’s 21st-Century Fox bid £24.5 billion (Dh 120 billion) for the UK broadcaster – trumping rival Comcast’s February offer of £22 billion (Dh 107 billion).
Fox finally looks set to be given regulatory approval by new culture secretary Jeremy Wright providing Murdoch meet a number of conditions to protect the individualism of one of the UK's major news broadcasters.
The bidding war started back in 2016 when Fox offered an opener of £18.5 billion (Dh 90 billion) for the 61% of Sky it doesn't already own. This prompted a long series of negotiations with the UK Department of Culture over corporate red tape and regulations.
It comes after concern that Fox is gaining a stranglehold over UK media and, as such, has forced Mr Murdoch’s company to agree to a number of concessions. These include Sky News remaining a UK news broadcaster, having independent editorial decisions from Fox and having its budget increased to £100 million (Dh 486 million) a year beyond 2030.
Fox's biggest shareholder is the Murdoch Family Trust, which is also the largest shareholder in News Corporation. It also owns The Sun, The Times and The Sunday Times; some of Britain's bestselling and most influential newspapers.
Announcing the offer, Fox said they "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. We strongly believe that a combined 21CF and Sky will be a powerful driver for the continued growth and vibrancy of the UK and broader creative industries.
"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".
Sky shareholders have been watching on in joy this year as the bidding war between two media giants saw share prices spike. "It's absolutely unbelievable - they are way overpaying" a source close to the deal told the BBC. An independent committee of Sky's board members set up to evaluate it said the offer "represents a substantial increase in value relative to the Comcast offer.”
This has prompted several hedge funds including Seth Klarman’s Baupost Group, Paul Singer’s Elliott Management, Davidson Kempner and Odey Asset Management to buy up Sky shares on the expectation that the bidding war between Fox and Comcast will continue.
However, Murdoch's bid for Sky has created tensions with Walt Disney, who has been pushing to purchase 21st Century Fox, recently increasing its offer from £32 billion (Dh 156 billion) to £54 billion (Dh 263 million). This deal would pass over all of Fox's assets except for its news outlet, that would be made into a new company which would be known as 'New Fox,' including ownership of Sky.
The result of this ongoing bidding war will have a massive impact on the future of the media industry, in a period where giant corporations such as Netflix and Amazon are dominating the market. Between them, Comcast, Walt Disney and 21st Century Fox represent around half of the total value of the US media industry, which hit $635 billion (Dh2332 billion) in 2016 and represents another step in the ongoing monopolization of corporations in the media industry.