Disney must bid for Sky even if Murdoch offer fails, watchdog rules

CREDIT Courtesy of Disney  Pixar

CREDIT Courtesy of Disney Pixar

Disney and Fox are said to have accepted these conditions. Fox now owns 61% of Sky and is in the process of buying the remaining shares. However, it also means they have a likely bidder for the business and a price floor should the Fox takeover be blocked by United Kingdom regulators and if Comcast doesn't formalize its proposed £12.50 per share offer for Sky.

United Kingdom regulators said Thursday that Walt Disney Co. must make an offer for all of Sky PLC, the British broadcaster, if its proposed acquisition of assets from 21st Century Fox Inc. proceeds. The deal for that is being reviewed by United Kingdom regulators, while Comcast has also said it was ready to make a competing offer for Sky.

Fox separately has agreed to sell its 39% stake in Sky to Disney as part of the deal to sell to Disney all its film and television entertainment assets. "The basis for this ruling is that, in accordance with paragraph (b) of Note 8 on Rule 9.1, the Executive considers that securing control of Sky might reasonably be considered to be a significant objective of Disney's acquiring control of Fox", the independent body noted. That's the same price offered by billionaire Rupert Murdoch's Fox to Sky shareholders in 2016 for the stake it doesn't already hold. Disney argued that owning Sky was not a major driver of its overall Fox deal - which includes buying Hollywood studio 20th Century Fox - and so that rule should not apply.

The Executive has further ruled that the Offer must be at £10.75 (€12.36) in cash for each ordinary share in Sky.

Shares in Sky on Thursday were down 0.2% in London at 1,307.00 pence, or GBP13.07, each.

It added: "At this stage, Sky shareholders are advised to take no further action". "We've got two big gorillas, neither of whom likes to lose".

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