The battle for Sky is set to go to an auction, which will be settled Saturday. Comcast and 21st Century Fox both have bids on the table for the European pay-TV giant, with Comcast’s currently the higher offer. If a “final and best” offer is not lodged by either party 5 p.m. Friday – which is not considered likely – the auction process will kick in.
The U.K.’s Takeover Panel confirmed Thursday that a financial shootout was in the offing, with the agreement of Sky, Comcast, Fox and Disney as the incoming owner of various Fox entertainment assets. “The Panel Executive has, after discussions with the parties, established an auction procedure which, assuming that a competitive situation continues to exist, is expected to commence at 5:00 p.m. (London time) on 21 September 2018 and end during the evening of 22 September 2018,” the panel said.
The process – which is highly unusual in the world of billion-pound takeovers – will comprise up to three rounds of bidding. If after two rounds no party has prevailed, “there will be a final round, in which both [suitors] may make an increased bid.”
Comcast’s current bid for Sky values it as £26 billion ($34 billion), or £14.75 per share. Fox has offered £14 per share. Both have upped their bids over the past months as their face-off played out. Fox already owns 39% of Sky, which has extensive pay-TV operations in the U.K., Germany and Italy.
According to the auction’s parameters, bids must be set at a fixed price, in pounds sterling. In the opening round, the would-be buyer with the lower offer currently on the table – meaning Fox at this point – makes the first bid. In the second round, Comcast can make a higher counter-bid. If Fox does not concede, there will be a third and final round in which both suitors submit increased bids. Sky shareholders will then decide which offer to accept. The Takeover Panel said it would publish details of the offers from each side after the auction.
The fight for Sky has been protracted, with numerous twists. Fox declared its interest in buying the remainder of Sky in 2016, having already failed in a previous effort in 2011. With stiff opposition to the Fox bid in the U.K., Comcast entered the fray earlier this year, setting up a bidding war between two media heavyweights. Disney, meanwhile, beat Comcast to a deal for a raft of Fox assets, including its 39% stake in Sky.
Both Fox and Comcast’s bids for Sky have received regulatory approval from British and European authorities. The battle for one of Europe’s biggest media operations now looks set to be resolved in a quick-fire showdown this weekend.