Watchdog arbitrates between shareholders and Disney in Sky battle

Disney must offer all Sky investors £14 a share if other bids collapse, Takeover Panel rules

Disney must offer Sky shareholders at least £14 a share to buy the business if its wider deal to acquire the bulk of 21st Century Fox completes before competing takeover bids for Sky, the UK Takeover Panel has ruled. Photograph: PA

Disney must offer Sky shareholders at least £14 a share to buy the business if its wider deal to acquire the bulk of 21st Century Fox completes before competing takeover bids for Sky, the UK Takeover Panel has ruled. Photograph: PA

 

The UK’s takeover watchdog has intervened to arbitrate between minority shareholders in Sky and its possible future owner Disney, setting the price the US media group will have to offer investors if rival bids for the pay-TV network collapse.

Disney must offer Sky shareholders at least £14 a share to buy the business if its wider deal to acquire the bulk of 21st Century Fox completes before competing takeover bids for Sky, the UK Takeover Panel has ruled.

The £14 minimum price has left some investors who had been pushing for a higher level - or “floor” - after Disney raised its offer for Fox in June disappointed, however.

The Takeover Panel’s intervention is the latest twist in a fiendishly complicated bidding frenzy over both Fox and Sky that has seen Disney been pitted against US rival Comcast in a fierce battle for assets that each believes is crucial to survive the digital disruption ravaging the media business.

Raised bid

Sky - already 39 per cent owned by Rupert Murdoch’s Fox, which has been trying to buy the rest since late 2016 - is the target at the centre of the battle. Earlier this week, Comcast trumped a raised bid by Fox for Sky, offering £14.75 to Fox’s £14 a share.

Disney will be forced to make the £14 a share offer for Sky only if neither the Comcast bid - which, assuming it is formally put to investors, needs 50 per cent plus 1 of Sky shares to approve it - nor the one from Fox complete before the bigger transaction does.

In those circumstances, Disney picks up the 39 per cent of Sky owned by Fox, but must offer the other 61 per cent of shareholders a price of at least £14 a share after the Takeover Panel confirmed a “chain principle” applies to the deal.

– Copyright The Financial Times Limited 2018