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British regulator sets 14 pound floor under Sky shares

Reuters  |  LONDON 

By and Arathy S Nair

(Reuters) - Britain's takeover regulator has decided that must offer 14 pounds a share for if it succeeds in buying Rupert Murdoch's Twenty-First Century Fox, in a key ruling in the takeover battle for the broadcaster.

The price set by the Takeover Panel on Friday is the same as Fox's current offer for the 61 percent of that it does not already own, which values the London-listed pay television business as a whole at 24.5 billion pounds ($32.2 billion).

But it is below U.S. giant Comcast's competing 14.75 pounds per share offer for Sky, which has put a 25.9 billion price tag on the business.

The Panel's ruling is important for investors as it sets a new, higher floor price under shares.

Sky, Fox, and are locked in a series of interlinked takeover battles, with and vying for control of Sky and and battling to buy the bulk of Fox's TV and film assets, including its 39 percent Sky stake.

The Panel had previously ruled that Disney must make an offer for the rest of Sky if it succeeds in acquiring Fox, including its Sky stake, before either or Comcast have taken full control of the broadcaster.

But the level at which Disney would be required to acquire the rest of Sky has recently been up in the air.

The Panel said in April Disney should match Fox's first offer for Sky, which was 10.75 pounds a share.

However, Disney last month raised its bid for the assets, including the Sky stake, to $71.3 billion. To ensure all Sky shareholders are treated equally, the Panel hiked the level at which Disney would have to make a mandatory offer for Sky.

The regulator said it had considered "the relative contribution of Fox's stake in Sky in the valuation work carried out by Disney's financial advisers" as well's Fox's most recent bid for the broadcaster when arriving at the 14 pounds a share price.

The Panel added it had "received submissions from a number of parties expressing diverging views" and that Sky planned to request a review of its decision.

It comes as the battle between Fox and Comcast for Sky intensifies.

On Wednesday, Fox hiked its bid to 14 pounds a share, trumping a 12.50 pound offer Comcast made earlier this year.

But Comcast struck back later on Wednesday with its 14.75 pound counterbid, which Sky's independent directors recommended to shareholders.

Sky shares were at 15.39 pounds in on Friday, down 0.4 percent.

The stock is trading above Comcast's bid amid investor anticipation that Fox will return with a better offer.

($1 = 0.7619 pounds)

(Reporting by in and Arathy S in Bengaluru; Editing by Susan Fenton/David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, July 13 2018. 17:32 IST
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