Buying some time to prepare a sweetened bid for European pay-TV giant Sky, 21st Century Fox posted an offer document today with a reminder of its £14-per-share offer, in compliance with UK takeover rules.
The maneuver came two days before a UK regulatory deadline, though the disclosure said Fox has until September 22 to revise its offer. The company said it plans to achieve the Sky acquisition via a takeover rather than a “scheme of arrangement,” as set forth by UK law. Final acceptance will require 75% or more of Sky shareholders accepting the offer. Sky said it will formally respond within 14 days.
The news hit the wire just hours before the Walt Disney Co. was to report its third-quarter earnings and indicate its latest thinking on Sky. The company will inherit Fox’s 39% stake in Sky via its pending takeover of most Fox assets, and would emerge as the owner of the full company if Fox updates its offer to top Comcast’s current $34 billion bid.
Fox, meanwhile, reports its own quarterly earnings on Wednesday and is widely expected to boost its Sky bid. In publishing the current offer, the company reminded investors and regulators of the dedicated website it has set up to relay all information pertaining to the Sky effort. Gaining full control of Sky’s 23 million subscribers and international reach has long been an obsession for Fox executive chairman Rupert Murdoch. His quest to roll up Sky has stretched on for multiple years due to regulators’ concerns about the conduct of his tabloid newspapers, given that Sky News is a powerful part of the satellite provider’s content offering.
The media conglomerates have gone back and forth in recent months. As of mid-July, Comcast is in pole position with an offer of £14.75 per share. Sky has until August 22 to respond to that bid. Last month, executives at Comcast detailed their strategy to drop their pursuit of the same Fox assets being acquired by Disney in order to focus on the Sky chase.
“We think it’s a great business and it will fit well and it’s a good use of capital,” CEO Brian Roberts said during a conference call with analysts. “It’s also unique.”