UK Regulators: Disney Must Buy Sky if Fox Satellite Consolidation Stumbles
A UK regulatory body said Thursday (April 11) that absent a completed takeover of the Sky satellite business by 21st Century Fox or the acceptance of Comcast’s rival takeover bid, The Walt Disney Co. will be required to purchase the majority interest in the British satellite company at a price of $15.24 per share.
Disney has already agreed to purchase certain Fox assets – including its FX, FXX and National Geographic cable channels, its 20th Century Fox film and TV production studios, and its existing 39% interest in Sky – for $66.1 billion. Fox, which had proposed consolidating its Sky interest last year, had hoped to close that deal before consummating the Disney purchase. But British regulators have been reluctant to give too much control to Fox’s ruling Murdoch family and have yet to approve that deal.
In a statement, the UK Panel on Takeovers and Mergers, an independent body established in 1968 to supervise and regulate takeovers, said it has informed Disney, Fox and Sky of its ruling that “following completion of the acquisition by Disney of Fox (after a spin-off of certain businesses), Disney will be required to make a mandatory offer to the holders of ordinary shares in Sky as a result of Fox’s stake of approximately 39% in Sky. The basis for this ruling is that the Executive considers that securing control of Sky might reasonably be considered to be a significant purpose of Disney’s acquiring control of Fox.”
Disney is required to make the offer within 28 days of completing its purchase of the Fox assets, unless Fox has closed its deal to fully consolidate the asset or if it has accepted another offer from a third party. Comcast, which has not yet made a formal offer for Sky, has said it was considering an all cash deal for the satellite company valued at $31 billion, or about $17.72 per share.
According to the Panel, Sky, noting the ruling, advised its shareholders to “take no further action at this stage.”
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