Fox Makes It Easier to Clinch Sky in Takeover Fight With Comcast

(Bloomberg) -- 21st Century Fox Inc. is making it easier to clinch a takeover of European broadcaster Sky Plc by lowering the bar for approval, to gain an edge over rival bidder Comcast Corp.

Fox on Tuesday switched the conditions of shareholder acceptance for its bid to a straight offer, from a scheme of arrangement. That means Fox can use its existing holding in the British company to get to an approval threshold of as little as 50 percent of Sky shareholders, from 75 percent previously.

“This allows Fox to take advantage of their 39 percent stake,” said Bruno Burki, an analyst at United First Partners in London. “They only need 11 percent of the total register to succeed, whereas Comcast still needs 50 percent plus one share.”

Fox on Tuesday formalized its previously announced bid of 14 pounds a share for the rest of Sky, starting a 46-day clock during which Comcast and Fox can change their offers. Fox’s bid is still below Comcast’s 14.75 pound-a-share price.

Fox’s own shareholders approved a $71 billion takeover by Walt Disney Co. last month, setting the stage for a huge swath of media assets to change hands, including 20th Century Fox, a stake in Hulu and cable networks such as FX. Disney also would get Fox’s current stake in Sky -- and a shot at acquiring the rest of that business.

Sky acknowledged the publication of Fox’s offer and said it would publish its formal response within 14 days, as set out under U.K takeover rules.

Fox originally structured its bid for Sky as a scheme of arrangement back in December 2016 to make it easier to buy out any minority shareholders that refused to sell, provided 75 percent approved the plan. That higher bar for approval also helped Fox and Sky make the case that non-Fox shareholders would be getting a fair chance to turn down the bid.

With the competition fierce for Sky -- both sides have already raised their offers -- Fox is now switching tacks, as it looks to gain the upper hand over Comcast.