Sky bid heats up for Fox, Comcast

21st Century Fox is expected to receive a green light from culture secretary Matt Hancock to take control of Sky this week, triggering a potential bidding war for the UK-based pay TV operator with Comcast.

Hancock’s clearing of the deal is expected to conditional on Fox selling Sky News – most likely to Disney – and promising to make up any shortfall in funding for the service to maintain its budget for the next 15 years.

The culture secretary’s clearance is expected to follow the closing on the consultation period on the deal last Wednesday, unless there are any further calls for new remedies to be considered.

Regulatory clearance will likely trigger a new, improved offer from Fox for Sky to see off Comcast’s rival, superior bid. Fox’s original bid for the company in 2016 valued the pay TV operators at £18.5 billion. The independent committee created to consider that bid withdrew its recommendation that it be accepted when Comcast tabled its own offer, valuing Sky at £22 billion. 

Comcast is expected to formalize its bid by the end of this week, after which Fox willhave a further 28 days to table a superior offer. 

Hancock said in June that the improved commitment from Fox around Sky News met the criteria he had set out covering Sky News’ viability over the long term, its continued its existence as a major UK news provider and its continued editorial independence.

The battle for Sky is taking place against the background of the bigger battle being waged between Comcast and Disney for control of 21st Century Fox itself. The UK Takeover Panel had earlier ruled that if Disney takes over Fox before the fate of Sky is decided, then Disney will be obliged to buy out the 61% of Sky that Fox does not currently own. This offer will not be required if Comcast has secured over 50% of Sky’s shares by that point.

Tags: Comcast, Fox, M&A, Sky