U.K. Takeover Body Hikes Price Disney Would Need to Offer for Sky

£14-per-share floor price is below Comcast’s £14.75 offer

The panel governing takeovers in the U.K. has raised the price Disney would be obliged to offer to buy Sky if Disney completes a deal for 21st Century Fox assets before either Fox or Comcast acquires the European pay-TV giant.

If Disney’s purchase of Fox assets, including Fox’s current 39% stake in Sky, closes before any separate deal for the pay-TV firm, Disney would be obliged under U.K. rules to make an offer for the remainder of Sky within 28 days. The takeover panel has now set a new share-price minimum of £14, meaning that Disney would essentially have to match Fox’s own current bid to buy out the 61% of Sky it does not already own. Comcast, however, has issued a richer counteroffer of £14.75 per share.

The takeover panel had previously set the floor price at £10.75 per share, which was the figure used by Fox in its original bid for Sky in December 2016. But Sky’s independent shareholders agitated for a higher price after bidding wars that saw the value of Sky and Fox rocket. Sky’s stock reached an 18-year high this week as Fox lodged a higher bid for Sky that was quickly topped by Comcast.

Fox’s new bid this week was for £14 per share, which values Sky at £24.5 billion ($32.5 billion). Comcast’s latest bid for Sky, at £14.75 per share, values Europe’s largest pay-TV firm at $34 billion.

Sky, which has recommended the Comcast offer to its shareholders, has told the panel that it will call for a review of its latest ruling. Disney and Fox, both of which made submissions to the takeover regulator, are considering their positions, the panel added. The chain principle does not apply if Comcast buys more than 50% of Sky, or Fox prevails in its efforts to buy Sky before Disney is able to complete its acquisition of Fox assets.

In another development in the battle for Sky, Friday, Comcast posted its official offer document for the business. The official offer gives Sky shareholders until Aug. 22 to accept the Comcast offer on the table.

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