UK's takeover authority says Disney must acquire Sky if Fox bid fails
It is the latest twist in an increasingly complex tangle of deals
Walt Disney will have to make an offer for the whole of Sky if 21st Century Fox’s bid to purchase the remaining 61 per cent stake in the European pay-TV company is unsuccessful, the UK’s takeover regulator said on Thursday.
The Takeover Panel also ruled that Disney would have to match Fox’s £10.75 (Dh56.03) a share offer for the Sky stocks, which is the same offered by Fox for the company stocks which it doesn’t already hold.
The ruling is contingent on Disney’s $52.4 billion purchase of Fox’s entertainment assets getting completed. Fox bid two years ago for the 61 per cent of Sky it does not control, following a failed earlier takeover attempt.
The Murdoch family, which controls Fox, wants to consolidate their hold on Sky as traditional media firms, faced with new competitors such as Netflix and Amazon, look to combine content creation and distribution channels.
Although the deal was approved by European authorities, it was derailed by Britain’s competition watchdog, who said in January that it is not in the public interest as it would give the global media mogul Rupert Murdoch and his family “too much control” over the country’s media.
Mr Murdoch’s family already have extensive media holdings, including stakes in newspapers such as The Sun and The Times.
While Fox’s Sky deal awaits approval, Disney made a separate bid to buy most of Fox back in December, including its existing stake in Sky. That deal is also awaiting regulatory clearance.
Forcing Disney to offer the same price as Fox did in 2016 is likely to disappoint some Sky shareholders who were hoping for a higher bid. However, it ensures a guaranteed bidder for Sky in the event that British regulators don’t sign off the Fox takeover.
Another twist in the tale came when American Comcast, which owns NBC and Universal, in February said it will pay £12.50 per share for Sky, setting up a race between the two media empires as they both sought to get their hands on the company set up in 1989 by Mr Murdoch.
If Comcast ends up acquiring Sky, Disney would not have to put forward a bid, the Takeover Panel said.
The UK’s Competition and Markets Authority is currently reviewing Fox’s bid for Sky and is due to report back to British culture secretary Matt Hancock by May 1, who will then have 30 days to decide whether or not to approve the deal.
In a separate development, Tom Watson, the deputy leader of the Labour Party, said that Fox’s potential involvement in a sports rights cartel should be taken into consideration by the regulators before they make a final decision on Mr Murdoch’s takeover of Sky.
It comes after the European Commission raided several media outlets on Tuesday, including the offices of Mr Murdoch's Fox Network in London, citing competition issues antitrust rules.
“The commission has concerns that the companies involved may have violated EU antitrust rules that prohibit cartels and restrictive business practices,” the EU’s executive branch said in a statement.
Mr Watson, who is shadow culture secretary, said the news of the raid of Fox’s office is “concerning”.
“If Fox has done something to violate EU laws then that should have a bearing on whether the deal receives approval,” The Guardian quoted him as saying.
Updated: April 12, 2018 06:21 PM