The Bidding War for Sky plc May Boil Down to a Blind Auction

Best Cable Deals
Video Broadcasting Services

The winner in a bidding war between Comcast® and 21st Century Fox for Sky plc will likely be decided in private. The corporate takeover rules of the United Kingdom could necessitate a blind auction to conclude or decide who will get a hold of the British broadcaster. In such kind of an auction, a bidder submits a secret offer to a third party arbiter. It is common in all commercial transactions, comprising cellular airwave auctions. However, it is rare when it comes to deal making that involve a large public company. Sky plc is a broadcasting giant with a presence in Europe. Its stock market value is GBP 26.8 billion.

21st Century Fox initially proposed to acquire the sixty-one percent of Sky plc in 2016 for GBP 10.75 per share. Once the proposed deal hit political and regulatory hurdles, Comcast® announced a bid to acquire the broadcaster for GBP 12.50 a share in February.

In July, Rupert Murdoch’s media empire increased its bid to GBP 14 per share and the Philly-based fastest internet provider came up with a counterbid that topped it slightly at GBP 14.75 a share.

Amid all that, Walt Disney and Comcast® separately traded bids earlier this year to acquire 21st Century Fox. Walt Disney emerged the winner in that, agreeing to acquire a portion of assets of Fox, comprising its stake in Sky plc, for $71 billion.

That leaves the two companies, with Fox being backed by Walt Disney, to bid for Sky plc. Both Comcast® and Disney have said that they desire the international footprint of the broadcaster and its ability to sell original TV programming and telecommunications services.

Fastest Internet Provider
High Speed Internet

Rupert Murdoch and family are main shareholders in Fox as well as News Corporation, which publishes the newspaper named The Wall Street Journal.

Under takeover regulations of the UK, Comcast® and Fox could still stay away from an auction in case one of the two or both of them submit one “best and final” bid by September 22. Neither company is likely to take that call, according to sources close to the deal. However, the companies could still opt out of the auction.

In Britain guidelines, which govern a blind auction associated with a corporate pact are there although no definite rules on that. The Takeover Panel of Britain usually works privately with two bidders to agree upon precise procedures, comprising how companies would put forward their bids and how they would eventually be disclosed. In case two parties cannot agree with the regulatory body on auction regulations, it can assume its own procedures.

If Comcast® and Fox enter into an auction, such regulations could be disclosed publicly later this month. An auction could take place soon – even prior to the September 22 deadline.

Add a Comment

Your email address will not be published. Required fields are marked *