Comcast Doesn’t Have to Raise Its Sky Bid—at Least for Now
(Bloomberg) -- Comcast Corp. doesn’t have to raise its offer for Sky Plc, at least not yet.
A ruling from U.K. takeover authorities on Friday kept a floor price of 14 pounds per share for Sky, below the U.S. cable giant’s overall 26 billion pound ($34 billion) bid.
That means Comcast, whose offer for the U.K. pay-TV company is currently the highest, doesn’t have to increase the price to win the battle for Sky unless it’s outbid by 21st Century Fox Inc. and Walt Disney Co.
Sky is caught up in a global fight for scale between Comcast and Disney. Comcast wants the British broadcaster so it can expand in Europe, where Sky has 23 million customers. Disney also wants Sky and would inherit the company as part of its purchase of most of Fox, if Fox can succeed in acquiring the 61 percent of Sky that it doesn’t already own.
The U.K. Takeover Panel’s decision Friday reaffirmed its earlier ruling on the price Disney would have to offer for Sky if Fox or another buyer failed to first succeed in acquiring majority control. The ruling followed an appeal by Sky of the initial decision.
Comcast’s offer for Sky is at 14.75 per share, already well above the Takeover Panel’s threshold.
Fox, whose latest offer for Sky is at 14 pounds per share, has a deadline of Aug. 9 to submit its bid to Sky shareholders. Unless it tops Comcast by then, investors probably won’t accept it.
Disney, which would ultimately need to agree for Fox to raise its Sky bid, has said that every 1-pound increase in the offer price for Sky shares would represent about $1.5 billion of extra debt and $60 million of interest costs a year.
Disney is scheduled to report third-quarter financial results on Tuesday and Fox reports on Wednesday.
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