The British government has finally given the go-ahead to 21st Century Fox’s bid to buy the 61% of Sky it does not already own, clearing the way for an expensive shootout between Fox and Comcast for control of Europe’s biggest pay-TV player.
The media heavyweights have already traded salvos this week. Fox upped its offer for Sky by 30% on Wednesday, ahead of the deal getting the green light in the U.K., which prompted Comcast to counter hours later with a richer $34 billion bid.
Jeremy Wright, who replaced Matt Hancock as Britain’s culture and media secretary earlier this week, announced the clearance of Fox’s bid on Thursday after months of regulatory review. Both bids by Fox and Comcast have now received official sanction to proceed.
Fox offered a range of concessions to get its Sky bid approved, including offloading Sky News to Disney and guaranteeing its funding for 15 years. Comcast has also offered guaranteed funding for Sky News and other commitments, including maintaining Sky’s West London base.
“The publication of the undertakings” – meaning Fox’s concessions – “marks the final stage of the public-interest consideration of this case….It is now a matter for the Sky shareholders to decide whether to accept 21CF’s bid,” Wright said.
The pay-TV company also issued a statement: “Sky welcomes the Secretary of State’s comments that this now marks the final stage of the public interest consideration of this case…Both offers for Sky are now capable of being put formally to Sky Shareholders.”
Fox had faced fierce opposition to its Sky bid in the U.K., with opponents frequently citing the Murdoch family’s control of key news and media assets. Sky News, which will now be transferred to Disney became central to the approval process. In the latest round of consultations, opponents had called for measures including curbs on the Murdoch family’s stake in Disney, should the Mouse successfully acquire Fox.
The fight for ownership of Sky is playing out against the backdrop of Disney and Comcast’s battle for a raft of Fox assets, including Fox’s current 39% stake in Sky. At present, Disney appears to have the upper hand in the contest for Fox, stirring speculation that Comcast will redirect its firepower into snatching away Sky as a standalone acquisition.
Should a deal for Fox’s assets – including the 39% share of Sky – close before control of the satcaster is resolved, the winning bidder would be required to make an offer for the remaining 61% of Sky, according to U.K. takeover rules.