Battle for Sky: Comcast, Fox at auction Saturday

This is the first bidding contest between competing contenders set up by the UK takeover panel since 2008.

Saturday's deadline in the long battle between 21st Century Fox and Comcast for European pay TV giant Sky, the British regulator of surrender on Thursday unveiled the details of the auction process to make a final decision.

The so-called OPA Panel unveiled the process and rules of the formal auction, which would be the first contender of contenders since 2008 if neither company is doing at the last minute.

According to the previous schedule for the sales process, the two contenders had until Saturday 5 pm. London time to soften their offers for Sky, submit a "best and final" offer or opt out of the process. The Takeover Board, however, said Thursday that if both parties remained in the race at 17 hours. London time Friday, which is considered likely at this point, an auction of up to three rounds will take place on Saturday.

"The auction procedure will consist of a maximum of three rounds, all of which will take place on September 22, 2018," the panel said. "In the first round, only the bidder with the lowest bid at the beginning of the auction (or, in the case where the two bids are at the same price, the last bidding bidder) may bid higher. However, only the bidder who was not eligible to bid in the first round may make a higher bid (even if no other bid was made in the first round by the other bidder). concluded after the second round (which will be the case if no additional offer is made in the second round).
will be a final round, in which both bidders can make an increased bid. "

In the final round, each party may submit its bid "provided that the other bidder also makes an offer in the final round." The Acquiring Body also stated that there was no increase in the price of the bid. offer from the other bidder (although it must be greater than the last bid made by the bidder making the bid). "

Once the auction is over, the POA Panel will publish the price tags for the two final offers and both companies will have to publish their final offers to shareholders no later than Thursday, September 27th.

The takeover committee noted that the two suitors could end up offering the same final price. In addition, the highest bidder in the auction does not necessarily win Sky, but Sky shareholders will have two weeks to bid their shares to the buyer whom they consider the best bid. "October 11, 2018 is the last day on which the Offeror's Offer may become or may be declared unconditional with respect to acceptances," said the Commission. Given that Fox already has a significant stake in Sky, some observers have suggested that it is possible that he might win the pay-TV company even though his final bid was slightly lower than Comcast's.

"When a competitive situation continues to exist at 17 pm on day 46 [after the latter of competing takeover offers has been formally published, which is Sept. 22] and no other procedure has been agreed between the competing bidders, the target company's board of directors and the jury, "a five-day auction process will take place in accordance with the UK Takeover Code.

The Takeover Board developed the process with Sky, Fox and Comcast, stating that "Sky, Comcast, Fox and The Walt Disney Company (as a person acting in concert with Fox) accepted the terms of the auction procedure. . "

Until now, Comcast has had the best deal for Sky. It has softened its offer for Sky to 26 billion pounds (34 billion dollars), or 14.75 pounds per share, following the news of Fox, which holds 39% of Sky, which had increased its offer to 24.5 billion pounds ($ 32.5 billion). ), or £ 14 per share.

In early August, Fox released its official offer document for Sky's shareholders, but retained its offer to buy at a price lower than Comcast's. The move gave Fox and Disney more time, making September 22 the deadline for both contenders to lift their Sky offers.

In July, Comcast ended a showdown with Walt Disney for much of 21st Century Fox, including its Sky game. Disney won the bidding war with a bid of $ 71.3 billion. Comcast said that he would rather focus on Sky.

Alice Enders, an analyst at Enders Research Analysis, said both sides have a lot to do with the auction results. "We know that Murdoch's family trust is reluctant to sell its shares in Sky because of tax obligations, regardless of its price.It's the same logic behind that the stock swap from Fox against Disney stock, "she says. THR. "It makes them very aggressive on Sky, especially thanks to Disney's firepower and [Disney chairman and CEO Bob] The desire to Iger for Sky. "

But she added: "The fight for Sky is clearly as fundamental to Comcast's Brian Roberts, even though shareholders still seem confused by the logic of buying a pay-TV company in Europe while the industry is declining to cut , whatever the reason. "Enders pointed out that" without Sky, they only have the contribution of the NBCU to the diversification of revenues and geographical areas ".

She pointed out that the auction is designed to maximize the purchase price of shareholders, adding, "This is what gives the curse of the overpayment to the winner. Disney estimated that £ 14 per share was a fair price (under the chain principle, Disney must bid on Sky when Fox closes if Sky does not close), anything that is higher will scare the 'margin'.