Sky’s the limit: Dramatic auction between Comcast and Fox nears its conclusion
The dramatic fate of Sky is nearing its finale, as a £26bn head-to-head auction between two of the world’s most powerful media companies enters into its final few hours.
Comcast is battling it out with Rupert Murdoch’s 21st Century Fox and its powerful soon-to-be owner Disney in a rare auction, which includes up to three rounds of bidding designed to culminate in two final offers for Europe’s biggest pay-TV broadcaster.
The price of both offers will be announced following the auction, after which the Sky board will recommend an offer for shareholders to accept.
A decision later today will put to rest a long-awaited bidding process which has seen Sky receive a flurry of investment from US giants looking to strengthen their markets against disruptors such as Netflix and Amazon.
Fox currently has a £14 per share bid on the table for the 61 per cent of Sky it does not already own, while Comcast has tabled a higher bid of £14.75.
Goldman Sachs is advising Fox on the deal, while Comcast has recruited Bank of America Merrill Lynch, Evercore and London boutique Robey Warshaw.
Sky is being advised by Morgan Stanley, PJT Partners and Barclays.
While Comcast’s current bid would value Sky at £26bn, analysts think the company could end up fetching a far higher price.
David Madden, an analyst at CMC Markets, said Sky could be sold for between £32.4bn and £37.6bn.
Corporate takeovers are rarely settled at an auction, and the Sky deal will be the biggest ever in the UK to be decided in this manner.
Just three British takeovers have been settled at an auction since 2007, including the sale of steelmaker Corus to Tata for £6.2bn in 2007.
Since Murdoch’s Fox first tabled a £10.75 offer in December 2016, Sky shares have more than doubled, and have risen 56 per cent since the start of the year.