With Wall Street and Hollywood buzzing about the Disney-Fox deal, which is believed to be set for an announcement this week, one of its biggest benefits to Disney would be the addition of European pay-TV giant Sky TV as a key international asset.
Fox has been in the midst of an arduous regulatory process as it seeks approval for its $15.6 billion purchase of the remaining 61% of Sky it does not already own. By comparison, Disney would have an easier time with regulators, says analyst Tom Eagan of Telsey Advisory Group in a research note this morning.
“Disney is better positioned than Fox to purchase 100% of Sky,” Eagan wrote. “We expect UK regulators would more easily approve of Disney’s ownership.”
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Last week, another delay cropped up in the saga as regulators postponed the publication of their latest report on the proposed takeover.
Fox already lost out on a chance to take over Sky six years ago in the wake of the phone-hacking scandal. Disney’s comparative lack of baggage gives it “leverage in the purchase price,” Eagan wrote. “There’s no reason Disney should pay a premium over the $14.36 per share that Fox has offered.”
While Disney has been in pole position in terms of negotiations with Disney, Comcast has also been in talks, and is also enamored of Sky as a key asset.
As the Fox bid for Sky has slowly wound its way through the regulatory process, the spread between the offer price and Sky’s trading price has narrowed. Starting the week, the spread was below 9%, the lowest level since July.
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