The UK Takeover Panel has declared that Comcast and Fox will need to compete in an auction to determine which company wins the bidding for pay-TV provider Sky. As neither has been able to complete its bid, they will enter a one-day auction of a maximum three rounds on 22 September.
Sky has been the subject of takeover interest since the end of 2016, when its largest shareholder 21st Century Fox launched a buy-out offer. While Fox's offer was tied up in regulatory hurdles, Comcast entered the fray earlier this year with its own offer. In July, Comcast raised its offer for Sky to GBP 26 billion, just after Fox increased its offer to GBP 24.5 billion. Since then neither has been able to reach all the conditions necessary to complete the takeover, while some shareholders have called for even higher bids.
The Takeover Panel has ordered the auction after consulting with all the parties, including Disney which is in the process of acquiring Fox, and all four companies agreed to the auction in an attempt to resolve the situation. The procedure will consist of a maximum of three rounds of bidding, with only cash bids accepted. In the first round, only the bidder with the lowest offer at the start of the process may make an increased bid. In the second round, only the offeror that was not eligible to make a bid in the first round may make an increased bid (and it may do so even if no increased bid was made in the first round by the other offeror). If the auction procedure has not concluded after the second round (which it will if no increased bid is made in the second round), there will be a final round, in which both companies may make an increased bid.
The bidding will not be made public. After the auction is completed, Comcast and Fox will need to make a statement to the market on their latest offers or re-state their previous bids; no further changes to the auction bids can be introduced, unless a third bidder emerges. Revised offer documents must be published by 27 September, and a deadline of 11 October has been set as the last day on which either offer can be declared unconditional as to acceptances.
