Takeover panel rules Disney must bid for Sky

US media company Walt Disney has been told it will have to make a full takeover bid for Sky, the European pay-television broadcaster operated by rival media company 21st Century Fox, even if the UK competition regulator scuppers Rupert Murdoch’s attempt to seize full control.

In December, Disney announced a $52.4bn (€42.1bn) deal to acquire a significant share of 21st Century Fox’s business interests in an agreement that would ultimately lead to it securing control of Sky and media company Star India.

Fox, which already owns 39 per cent of Sky, is already seeking to secure full control of the company by acquiring the 61 per cent stake it doesn’t already own. If the UK’s Competition and Markets Authority gives the green light to Murdoch’s bid and Disney is then allowed to conclude its Fox deal, Sky would come under full ownership of Disney.

However, Disney in December made an alternative proposal should Fox’s bid for Sky fail to gain regulatory approval. It approached the UK takeover panel, the city watchdog for corporate deals, stating it did not wish to be forced to pursue a full takeover of Sky if Murdoch failed to secure control.

The takeover code stipulates that companies are normally obliged to make an offer if they acquire a stake exceeding 30 per cent. In a statement, the takeover panel said: “The panel executive considers that securing control of Sky might reasonably be considered to be a significant purpose of Disney’s acquiring control of Fox. Following the acquisition by Disney of Fox, Disney will be required to make a mandatory offer to the holders of ordinary shares in Sky.”

In February, US media company Comcast submitted a new offer for Sky. Comcast tabled a “superior cash proposal” of £12.50 (€14.17/$17.47) per share for Sky alone, representing a 16-per-cent increase in value over the existing 21st Century Fox offer for Sky. The offer would value Sky at $31bn.

Sky is a major sports broadcaster in Europe and is the primary domestic rights-holder of football’s English Premier League in the UK.