Sky facing Disney, Comcast auction

The future of European pay TV operator Sky could come to a dramatic conclusion over the coming weeks in a bid to end the ongoing battle for the company between US giants Comcast and Disney.

While Disney is in the process of acquiring an array of assets from Rupert Murdoch’s 21st Century Fox, including 39% of Sky, but the Mouse House has been unable to secure a deal to buy the remaining 61%.

Fox’s Disney-backed bid for Sky is currently £14 (US$17.80) per share, behind the £14.75 offered by NBCUniversal-owner Comcast for the entirety of the company. The latter valued Sky at £26bn but fewer than 1% of investors have accepted the offer despite it having the backing of the Sky board.

If no progress is made before September 22, UK regulators could force the issue by setting up an auction to decide the victor.

That could see the UK Panel on Takeovers and Mergers agreeing a set of parameters for the contest with Fox, Comcast and Sky, including the number of rounds and the make-up of bids.

If no agreement on the auction rules is reached, a five-day auction could take place with one bid from each party each day, with offers being made public. Bloomberg reported last week that the companies had been exploring the possibility of an auction.

An auction would end years of uncertainty over the future of Sky, which operates pay TV networks and streaming services across Europe. Fox initially made a £10.75-per-share offer for Sky in December 2016, and after numerous regulatory issues in the UK Comcast entered the race.

Investors believe that race has some way to go, with shares trading at £15.77 in early trading today.