Why Rupert Murdoch Is in No Hurry to Raise His Bid for Sky

Updated on
  • Comcast doesn’t have to formalize offer until Fox-Sky cleared
  • That gives Fox, Disney time to craft, weigh a counter attack

Rupert Murdoch

Photographer: Jonathan Fickies/Bloomberg

Rupert Murdoch’s 21st Century Fox Inc. wants to wait for Comcast Corp. to formalize its offer for Sky Plc before making its next move on the broadcaster it’s been eyeing for almost eight years, according to people familiar with the matter.

How long is up to his opponent.

To move ahead with its $31 billion proposal to buy Sky and keep it out of Murdoch’s hands, Comcast must formalize the offer with the U.K.’s takeover watchdog. Under U.K. rules, though, the U.S. pay-TV company is under no pressure to do so until Fox’s own bid for Sky is cleared by regulators and the two companies convene a shareholder meeting to vote on the deal.

That could be at least two months away, as the U.K. competition regulator has until May 1 to submit its final report on the Fox-Sky transaction. Comcast, which is bidding about 16 percent more, would typically have to clarify its offer at least seven days in advance of a shareholder meeting.

When Comcast entered the fray last month with a surprise proposal to acquire Sky, the company threatened Murdoch’s plan for Fox to buy the 61 percent it doesn’t already own and sell the whole company to Walt Disney Co. The U.K. TV provider is part of Disney’s $52.4 billion agreement to purchase most of Fox’s film and TV assets, announced in December.

The holdup gives Disney and Fox, which in 2016 started its second bid to control Sky, time to figure out what they might want to do next. Sky shares rose 0.4 percent to 13.26 pounds in London, bringing its year-to-date increase to 32 percent.

Selling the Deal

In the meantime, Comcast is out selling the merits of its proposal -- Steve Burke, chief executive officer of Comcast’s NBCUniversal division, was in San Francisco and Chief Financial Officer Mike Cavanagh was in Palm Beach, Florida, in recent weeks addressing attendees at investor conferences.

“If the Disney-Fox deal happens, either it’s all going to Disney, or if the Disney-Fox deal doesn’t happen, at some point Fox might buy the whole thing,” Burke said at a Morgan Stanley conference. “It’s clearly going to trade, it’s a very unique asset and businesses that we’re very comfortable with. And so we decided to go for it.”

— With assistance by Gerry Smith

(Updates to add Sky shares in sixth paragraph. A previous version of this story correct conference attendance and the source of quote in final two paragraphs.)
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