UK regulator: Disney must offer to buy all of Sky following 21CF deal

Disney will be required to make a mandatory offer for all of Sky after completing its proposed acquisition of Twenty-First Century Fox, according to the UK Panel on Takeovers and Mergers.

The regulator said that Disney will be compelled to make an offer within 28 days of closing the deal at the same £10.75 per share price tabled by 21st Century Fox for Sky back in December 2016 – provided that 21st Century Fox has not already acquired 100% of Sky by then.

The offer would also not be required if Comcast, which announced an offer for Sky earlier this year, or any other party has already acquired more than 50% of Sky’s shares by this point.

The takeovers panel said that the basis of the ruling rests on the belief that “securing control of Sky might reasonably be considered to be a significant purpose of Disney’s acquiring control of Fox.”

In a statement, Sky said that it noted the panel executive’s ruling and advised shareholders to take no further action at this stage.

21st Century Fox and Sky agreed terms of a takeover valuing the pay TV operator at £18.5 billion (€22 billion) back in December 2016, but the deal is still awaiting approval.

21st Century Fox agreed to pay £11.7 billion for the 61% it does not already own of Sky. The £10.75 per-share price marked a premium of approximately 40% on the closing price of £7.69 per Sky share on December 6, 2016 – the last business day before Sky received the initial proposal from 21st Century Fox.

Separate to this, in December 2017, Disney agreed a US$66 billion deal that will hand it most of 21st Century Fox’s TV and film assets, including its 39% stake in Sky. This is still subject to regulatory approvals.

In February of this year US cable giant Comcast made its own £22.1 billion (€25.0 billion) offer for Sky, marking a 16% increase on 21st Century Fox’s agreed takeover price for the company. Today’s UK Panel on Takeovers and Mergers ruling adds another company to Sky’s list of potential buyers.

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