Battle for Sky TV to be decided by one-day auction

Battle for Sky TV to be decided by one-day auction

Britain's takeover panel said that it was prepared to take the rare step of intervening in the battle for Sky by running an auction that lasts for a maximum of three rounds.

Fox has always been trying to acquire the 61 percent of Sky it doesn't already own.

The panel's ruling sets the scene for an auction that begins at 5pm on Friday and ends the next evening, as all sides involved in the process agreed to waive usual procedure for a contest over five days from Monday - the first working day after the deadline.

Comcast and 21st Century Fox will settle their battle for control of broadcaster Sky through a rare auction created to put an end to months of offers and counteroffers from the American media empires seeking a foothold in the European pay TV market.

The company going into the auction with the lowest offer, now Fox, will be the only party allowed to increase their bid in the first round of the auction.

The takeover battle for Sky plc, the owner of Sky News, will be decided in a three-round auction to conclude on Saturday evening, it was announced today. With stiff opposition to the Fox bid in the U.K., Comcast entered the fray earlier this year, setting up a bidding war between two media heavyweights.

"Shareholders will be delighted at how this has all played out, having seen the share price double since just before the original offer was made by Twenty First Century Fox nearly two years ago", said Laith Khalaf, a senior analyst at Hargreaves Lansdown.

Fox raised its offer to £24.5bn, but this was soon trumped by a £26bn bid from Comcast.

British hedge fund manager Crispin Odey, whose firm is a shareholder in Sky, has previously said the company should be valued at a minimum of 18 pounds a share.

Sky shares edged up less than 0.1 percent to 15.81 pounds on Thursday. Disney, meanwhile, beat Comcast to a deal for a raft of Fox assets, including its 39% stake in Sky. Bloomberg earlier reported the timing of the one-day auction to settle the biggest purchase since the panel was established in 1968 to supervise and regulate takeovers of British companies.

If Comcast does keep the auction alive, a third and final round will be held, with both companies submitting simultaneous bids.

The British broadcaster has a market capitalization of more than $35 billion. In the second round, Comcast can make a higher counter-bid. They would not be bidding blind and would know the outcome of the first round, a source with direct knowledge of the situation said.

It's rare for a United Kingdom takeover to be decided by auction but the process is created to produce final bids from each suitor that can then be evaluated by shareholders.

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