UK takeover regulator ups price Disney must pay for Sky if Fox bid succeeds
Disney will have to pay £14 per Sky share as part of the Takeover Panel’s ruling.
Sky shareholders will pocket at least £14 per share after the UK’s takeover regulator said Disney will have to up its buyout price if it is successful in a proposed takeover of 21st Century Fox assets.
The Takeover Panel has said Disney will have to offer minority shareholders £14 per share, marking an increase from the £10.75 baseline it set earlier this year, in light of Disney’s increased offer for Fox.
Walt Disney is bidding to buy a major chunk of Fox assets including its stake in Sky, and recently raised its bid to 38 US dollars per share (£28.94), valuing the deal at around 71.3 billion US dollars (£54.3 billion).
Rupert Murdoch’s 21st Century Fox currently holds a 39% stake in Sky and is trying to acquire the remaining 61% it does not already own.
The deal would put the stake in Disney’s hands.
Given that the 39% stake – deemed a controlling shareholding – would be transferred to a new owner, rules stipulate that the new owner must offer the minority investors an opportunity to exit by buying out their shares.
However, that requirement will no longer hold if Fox successfully takes over the whole of Sky as there will be no minority investors left in the business.
Disney has until 5pm on July 17 to call for a review of the ruling.
The offer brings it in line with Fox’s bid of £14 per share, but below Comcast’s bid of £14.75.
Sky shares were down nearly 0.4% in afternoon trading.
Fox was earlier this week given the UK Government’s all-clear to take over Sky, though the company still faces a battle to see off rival suitor Comcast.
Newly appointed Culture Secretary Jeremy Wright said he agreed with his predecessor’s final decision to accept Fox’s planned sale of Sky News to Disney should it succeed in buying Sky – a move clearing the final regulatory hurdle for Fox.
The Government has already separately cleared Comcast’s bid for Sky.
The Government had been concerned over the impact that Fox’s takeover of Sky could have on UK media, given that the Murdoch family also owns News Corp – the publisher of a raft of newspapers including The Sun and The Times.
Under its plans to appease Government concerns over media plurality, Fox has pledged to offload Sky News to Walt Disney, and provide a Disney-owned Sky News channel with funding of at least £100 million a year for 15 years.
But the takeover saga has stepped up a gear as Comcast increased its offer for Sky to £26 billion earlier this week, just hours after Fox hiked its bid to £24.5 billion.
All eyes will now turn to Fox to see if it will increase its offer in turn.