Disney forced to bid for Sky: How Britain's takeover umpire has just thickened the plot

Oliver Gill
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It is well over a year since 21st Century Fox agreed its original deal with Sky (Source: Game of Thrones/HBO)

As corporate stories go, this one has more plot twists than Game of Thrones.

Sky investors were buoyed at the end of February as Comcast attempted to hijack Rupert Murdoch’s painfully slow takeover of the chunk of Sky he doesn’t already own.

Shares hit levels last witnessed during the dotcom bubble – climbing above the £12.50 offer from Comcast – as markets sensed a bidding war.

But Murdoch had other ideas. To date, a counter-offer has failed to materialise.

Instead of upping its offer, Murdoch’s 21st Century Fox has doubled-down on a charm offensive aimed at the Competition and Markets Authority (CMA), the regulator whose recommendation will have the biggest influence on culture secretary Matt Hancock’s go/no-go decision on the matter due in June.

Fox’s repeated sweetening of its takeover approach most recently saw Disney dragged into the first stage of Murdoch’s masterplan with an offer to offload loss-making Sky News to the venerable cartoon giant.

Meanwhile, Fox's spin doctors are keen to stress that Comcast’s offer is only possible and far from certain.

Read more: Why Sky's Premier League victory is perfectly timed for Rupert Murdoch

Fresh twist

With this week’s European Commission raid of Fox’s Hammersmith offices fresh in the memory (details of which remain painfully thin), UK takeover regulators yesterday delivered a fresh twist to the tale.

If either Fox or Comcast fail to win Sky, but Murdoch still sells his wider global stable of assets to Disney, the Takeover Panel has decreed that the home of Mickey Mouse will have 28 days to stump up £10.75 to those holding the 61 per cent of shares Fox doesn't already own.

So let’s take stock for a second: while one UK regulator (the CMA) is wondering whether to block one company (Fox) from buying Sky; another (the Takeover Panel) is forcing a different firm (Disney) to do so. It’s a delicious irony that won't be lost on many across the City.

Yesterday's move does give disappointed Sky shareholders some solace though. The Takeover Panel decision has effectively handed them an insurance contract – a put option if you will – meaning shares are now worth at the very least £10.75 each. Yes, all the deals could fall through; but assuming one of them sticks, that price is a heck of a lot more than what Sky shares have been changing hands for during most of the last 18 years.

Read more: Disney must make offer to Sky shareholders if Fox's takeover fails

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