Fox fires starting gun on new Sky offer deadline

Fox posted its formal offer document, without improving its price, setting in motion a timetable to end the uncertainty over Sky's future

Rupert Murdoch, co-chairman of Twenty-First Century Fox. Firm now has 46 days to up its offer. Bloomberg

Twenty-First Century Fox has triggered a 46 day deadline to raise its bid for Sky in a battle with Comcast for control of the British pay-TV group.

Under British takeover rules, Rupert Murdoch’s Fox now has until September 22 to trump Comcast's £14.75 per share offer for Sky, which values the broadcaster £25.9 billion (Dh122.75bn), after it formalised its own £14 per share bid.

Comcast gatecrashed Fox's attempt to buy the 61 per cent of Sky that it does not already own earlier this year and the US cable giant's latest, higher offer, which it submitted in July, has been recommended to shareholders by the broadcaster's independent directors.

Fox posted its formal offer document, without improving its price, on Tuesday, setting in motion a timetable to end the uncertainty over Sky's future by triggering a 46-day period during which both Fox and Comcast can lift their offers.

If the situation is not resolved by then, Britain's Takeover Panel can run an auction to bring the complex and long-winded transatlantic takeover battle for Sky to an end.

However, Fox may opt to walk away from the Sky deal rather than taking on Comcast, people familiar with the matter said.

Sky shares were up 1 per cent at £15.355 pounds on Wednesday, signalling that investors expect the bidding war to continue.

In the document, Fox said it was switching from a scheme of arrangement to an offer. That means it can choose to lower its acceptance threshold from 75 per cent of Sky's minority shareholders to a simple majority of all the broadcaster's shares, including its own 39 per cent stake.

"Flipping to an offer affords Fox more flexibility should they wish to come back with a higher number," analysts at Olivetree Financial said. "A scheme is cumbersome as you would constantly need to co-ordinate your actions and intentions with the Sky board."

Fox also said it expects to pay its advisers, which include Deutsche Bank, Goldman Sachs and Centerview Partners, about £242 million if its Sky bid succeeds.

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Since submitting its first £10.75 per share bid for Sky in December 2016, Fox has agreed to sell the bulk of its TV and film assets, including its Sky stake, to Walt Disney.

Comcast had been vying with Disney for the Fox assets but last month dropped its pursuit to focus on buying Sky.

In a separate announcement, Sky acknowledged Fox's offer document and said its independent committee would respond to the offer within 14 days.

The Takeover Panel, which regulates merger and acquisitions in Britain, ruled earlier this year that Disney would have to make an offer for the rest of Sky if its deal for the Fox assets completes before either Comcast or Fox acquire the UK broadcaster.

The regulator said last month that the level of any mandatory Disney offer should be £14 a share, the same price as Fox's current offer.

But the Takeover Appeal Board, an independent body, said on Wednesday that "several interested parties" had lodged appeals against the ruling and that it would meet to consider their petitions.