Sky Auction Is Biggest Test for 50-Year-Old Takeover Body
(Bloomberg) -- The future of British broadcaster Sky Plc will be decided with help from an influential body founded half a century ago to bring more discipline to M&A battles.
The Takeover Panel is stepping in as the fight between Comcast Corp. and 21st Century Fox Inc. for Sky heads to an auction starting later on Friday. Staffed mostly by financiers, corporate executives and lawyers, the Panel symbolizes Britain’s cultural hostility to state intervention in business, although since 1986 its decisions can be put to review by the judiciary.
The stakes are high as the U.S. media giants go head-to-head for the 27 billion-pound ($36 billion) pay-TV company and arbitrage funds bet heavily on the outcome. The panel needs to get the best outcome for Sky shareholders.
The highest offer so far, from Comcast, is already 87 percent above Sky’s price before Fox made its first approach in December 2016. Sky’s stock -- currently above Comcast’s 14.75 per share bid -- shows investors expect the auction to yield an even richer result. Sky shares closed unchanged at 15.8 pounds in London on Thursday.
Auctions don’t always lead to higher bids, though, as some of the rare, recent examples show:
Corus Group Plc (2006)
Imprint Plc (2008)
Enodis Plc (2008)
QXL Ricardo (2005)
(Sources: Olivetree Financial, Bloomberg News)