Analysts have contrasting views about how the Sky (SKY) takeover saga will play out as Comcast trumps the bid from Rupert Murdoch’s 21st Century Fox with a £12.50 per share cash offer.
Back in December 2016, Sky recommended a deal from Fox to buy the 61% of the business it did not already own for £10.75 per share.
With the shares now trading above Comcast’s offer at £13.17, investors are clearly expecting a bidding war to ensue.
Since making its initial approach more than a year ago, Fox’s bid has come under the scrutiny of regulatory authorities with a final decision on whether to approve the deal due from the UK culture secretary in June.
Disney has also emerged as a player in this story after agreeing to buy Fox’s media assets including its existing stake in Sky.
Clearly this is a prized asset given its leading position in the UK, Italian and German TV markets.
WILL FOX COUNTERBID?
Liberum analyst Ian Whittaker says: ‘There is the obvious question of whether Fox would want to counterbid. After all, it is selling its Sky stake to Disney which suggests already it wants to exit at the right price.
‘If Fox did want to raise its bid, it would presumably need approval from Disney to do this or, if Disney refused, have to fund the extra price by itself, which means it is then looking at a loss if Disney did end up acquiring 100% of Sky.
‘We think the simplest - and best - thing for Fox to do is accept the bid, and it is likely Fox will now walk away.’
Mirabaud’s co-head of the Global Thematic Group research team, Neil Campling, disagrees. ‘There is no way we can see that Fox will walk away given how advanced the regulatory clearance process is,’ he says.
‘This bid marks a floor, not an end to this particular saga. Let the battle commence.’
