The bidding war for Sky’s assets are set to intensify in September, with Sept. 22 being the closing date for any such bid.
British antitrust regulators have disclosed that Elliott Management believes Sky’s valuation is more than $34 billion, higher than any current offer on the table.
While Disney has agreed to a separate deal to acquire TV and film assets from Fox, which includes its Sky holdings, for around $71 billion, it was forced to raise its bidding price after Comcast gate-crashed the deal.
Currently Comcast has gained the upper-hand in the fight to acquire Sky with its offer of 14.75 pounds a share for every Sky’s share, trouncing Fox’s 14 pounds a share bid that it made in July.
Activist investor Elliott, which has a 4.3% stake in Sky, along with hedge funds Farallon Capital and Davidson Kempner have argued that Sky is worth at least 15.01 pounds a share in the wake of Disney’s improved offer for the Fox assets, said Britain’s antitrust regulator – the Takeover Panel. This would value Sky at $34.3 billion (26.4 billion pounds).
The issue here is – the price Disney might be compelled to offer for a 100% takeover of Sky. This is set by the Panel and essentially puts a floor under Sky’s shares, which closed at 15.44 pounds on Wednesday in London.
In April, the Panel ruled that Disney would have to buy Sky if its deal for the Fox assets completes before either Fox or Comcast have managed to take control of the British broadcaster.
The disclosure of the valuation by different parties is significant since the battle to acquire Sky is yet to be completed.
Comcast and Fox have until September 22 to revise their offer. If by then Sky’s future still remains foggy, the Panel has the power to intervene and bring the bidding war to an end by running a formal auction.