Fox improves Sky bid

21st Century Fox has increased its offer for the remaining 61% of European pay TV operator Sky that it doesn’t already own, valuing the company at £24.5bn (US$32.5bn).

The £14 per share offer is an improvement on a rival bid from Comcast, which offered £12.50 per share earlier this year. Fox said Sky’s independent committee had agreed the deal.

The US media giant, itself the subject of a bid for its assets from Disney, said Sky’s independent committee “intends to unanimously recommend” the offer.

Fox, which expects the acquisition to complete in the third quarter of 2018, said in a statement a combined Fox-Sky would “create a world-class business positioned to deliver the very best entertainment experiences well into the future.”

“We strongly believe that a combined 21CF and Sky will be a powerful driver for the continued growth and vibrancy of the UK and broader global creative industries,” it added.

Fox said the “enhanced scale and capabilities” would “enrich” Sky, “especially at a time of dynamic change in our industry.”

“This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world, but none of whom have demonstrated the same local depth of investment and commitment to the UK and to Europe,” the company added.

Fox is still waiting for the UK government to formally greenlight its approach for Sky. Last month the government said Fox would have to ensure the annual budget for UK network Sky News remains over £100m (US$130m) if it was to proceed with its takeover.

The then culture and media secretary Matt Hancock also ruled that if Disney was successful in its US$52.4bn attempt to acquire Fox assets including Sky, the Mouse House would also be required to fund the UK news network. Hancock was replaced by Jeremy Wright in a cabinet reshuffle this week.

It also stipulated that Disney would not be able to sell the channel for 15 years without the secretary of state’s consent. A final decision on the initial ruling is expected this week.

The latest offer comes almost two years since Fox made its original approach for Sky with a £10.75 per share deal in late 2016, having seen its first attempt to take over the company in 2011 fail due to the UK phone hacking scandal. Sky has pay TV and streaming operations across Europe as well as production and distribution interests.

However, the race could still have some way to go, with analysts believing the bidding could rise as high as £16 per share, valuing the pay TV operator at around £27.5bn.

Comcast is also involved in a bidding war against Disney to acquire Fox assets, having offered US$65bn for a slew of its entertainment interests, including Sky.

The Mouse House responded with a US$71.3bn bid, which currently leads in that particular battle. Concerns over US regulatory obstacles have lessened since AT&T’s deal for Time Warner made it through the US legal system.