Rarely used procedure to determine outcome of competing bids from Comcast and Twenty-First Century Fox
UK regulator invokes auction to settle Sky bidding war
Britain's takeover regulator has taken the rare step of settling the battle for European broadcaster Sky through an auction procedure after competing bids from Comcast and Twenty-First Century Fox remained in place.
The Takeover Panel said the auction would start, assuming that a competitive situation continues to exist, at 17.00 London time on Friday and end on the evening of Saturday, with a maximum of three rounds.
Sky is at centre of a bidding battle between Rupert Murdoch's Fox, which already owns 39 per cent of it, and US cable giant Comcast.
Comcast currently leads Fox in the fight with a £14.75 a share offer that values the broadcaster at £25.9 billion (Dh125.65bn) and has been recommended by the pay-television group's independent directors.
That trumped the £14 a share offer made by Fox earlier in July for the 61 per cent of Sky it does not already own, and is 37 per cent above Fox's original £10.75 a share bid.
Walt Disney has also agreed a separate deal to buy TV and film assets from Fox, including its Sky shareholding, for about $71bn.
"In order to provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5, the panel executive has, after discussions with the parties, established an auction procedure," the regulator said in a statement.
In the first round of the auction, the offerer with the lowest offer at the start of the process can may make a higher bid and the other suitor can do so in the next round. If the auction goes on, both offerers may make an increased bid.
An auction for Sky, which broadcasts to 23 million households across Europe, would the biggest ever deal in the UK to be decided by a panel-run auction.
There have only been three British takeover situations since 2007 that have involved auctions handled by the regulator, including the £6.2 billion- sale of Anglo-Dutch steelmaker Corus to India's Tata Steel, according to analysis by Reuters.
A fourth battle ended just before an auction was due to start when Royal Dutch Shell abandoned its takeover attempt of gas explorer Cove Energy in 2012, allowing Thailand’s Exploration & Production to clinch a $1.9bn deal. That marked the last time the UK invoked the auction procedure.