Daily Management Review

A Blind Auction Likely To Settle Fox, Comcast Battle For Sky


09/18/2018




A Blind Auction Likely To Settle Fox, Comcast Battle For Sky
The question of who would ultimately takeover Sky would be decided by a sealed bids auction if there is no case of best-and-final offer from any of the parties till the end of te current week.
 
US entertainment giants Comcast and Twenty-First Century Fox have been fighting out hard against each other to take over the one of the most coveted the assets of the entertainment and news industry. It has been almost two years that none of the companies has relented from the fight for the British broadcaster Sky with rival bidding. And now a very public contest is apparently the outcome of battle as a final outcome.
 
The blind auction would be held because non of the of the U.S. media giants have relented their positions in the bidding war and if this situation continues till Saturday, UK regulators would take over the auction process under the British takeover rules.
 
"For now, Comcast seems to be in pole position, but it's not a slam dunk. There's so much to play for and expect both companies to open up the war chest," Paolo Pescatore, an independent telecom and media analyst, said in a television interview.
 
"This represents a great opportunity to own a prized asset which will prove to be a worthy long-term investment," he added.
 
A third-party arbiter is given secret offers by the bidders under this form of auctions. This method of a takeover is very unusual in case of high profile mergers and acquisitions as is the case with Sky.
 
The blind auction would be held by the body that regulates U.K. mergers and acquisitions in the UK, - the Takeover Panel.
 
The two US companies are so eager to take over the assets of Sky because a favourable deal would allow the winning company to spread its footsteps outside of North America and would be able to directly reach consumers instantly. Plus the stock market value of Sky is about £26.8 billion ($35 billion).
 
"It is so close to call that a sealed bid will be the only way to decide the outcome," Pescatore said.
 
The importance of Sky for the two American firms is also because of stagnant demand in their home market. A large section of American consumers are spending more on online means of entertainment and less on cable subscriptions. The global entertainment scenario is also rapidly changing with the very fast rise in popularity of entertainment upstarts like Netflix and Amazon and the legacy entertainment giants have been forced to invest billions to complete with online threats.
 
39 per cent of British broadcaster Sky is owned by Fox. Sky is also believed to have a paid subscriber base of  23 million customers throughout the entire Europe an dis the market leader.
 
The British broadcaster also has a range of coveted content and software for television. It also owns the broadcasting rights of the English Premier League soccer matches.
 
 (Source:www.cnbc.com)






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