Disney must bid for Sky, takeover umpire rules

Randall Padilla
April 13, 2018

Rupert Murdoch-owned Fox now owns 39 per cent of Sky. The deal for that is being reviewed by United Kingdom regulators, while Comcast has also said it was ready to make a competing offer for Sky.

Disney will be required to make a mandatory offer for all of Sky after completing its proposed acquisition of Twenty-First Century Fox, according to the UK Panel on Takeovers and Mergers.

Disney and Fox are said to have accepted these conditions.

Shares in Sky on Thursday were down 0.2% in London at 1,307.00 pence, or GBP13.07, each. In January, the United Kingdom competition watchdog ruled that the deal would be against public interest on media plurality grounds and would give too much control to the Murdoch family, which controls Fox. "Further advice to Sky shareholders will be announced in due course". Earlier in the month, the company proposed two remedies to address plurality concerns voiced by United Kingdom mergers regulator the Competition & Markets Authority.

Fox faces a number of regulatory hurdles after the UK's competition watchdog found the £11.7bn deal was "not in the public interest". "The basis for this ruling is that, in accordance with paragraph (b) of Note 8 on Rule 9.1, the Executive considers that securing control of Sky might reasonably be considered to be a significant objective of Disney's acquiring control of Fox", the independent body noted. Rice said the new company will probably just be called "Fox".

"We think Sky is an outstanding company", said Comcast CEO Brian Roberts in a statement at the time.

If that deal doesn't close before Disney's $52.4 billion deal for Fox, then Disney is required to make a mandatory offer for Sky at a price of £10.75 per share. Separately, Fox has been trying to win regulatory and shareholder approval for an agreement to consolidate its ownership of Sky, by buying the 61% it doesn't already own.

The decision from the Takeover Panel, which applies City rules on takeovers and mergers under a code created to ensure shareholders are treated fairly, disagreed with Disney's argument that it should not have to do so.

Other reports by AllAboutTopnews

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