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Sky shares rise after Disney US$88bn bid for 21st Century Fox

The bidding war appears to have moved into its end-game
Sky shares rise after Disney US$88bn bid for 21st Century Fox
Life in the fast lane: Sky owns the UK rights to F1

Shares in Sky PLC (LON:SKY) jumped 3% after it emerged that The Walt Disney Company (NYSE:DIS) has increased its offer for 21st Century Fox Inc by US$10 a share to US$38, valuing the maker of Modern Family and Family Guy at US$71.3bn.

The offer trumps a US$65bn deal tabled by Comcast (NASDAQ:CMCA) – and looks like it was pitched as a knock-out bid.

Sky is caught in the cross-fire as Fox owns 61% of the satellite broadcaster and Premier League rights holder.

Fox shareholders can opt for cash or take their payment in Disney stock.

It’s reported that Fox chairman Rupert Murdoch and Disney boss Bob Iger met Tuesday night before this new bid was submitted.

In early New York trading, Fox shares were up 63% at US$47.09, while Disney shares rose US$107.75, and Comcast shares were up 0.1% at US$32.84.

In a statement, Murdoch said: "We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry.

"We remain convinced that the combination of [Fox's] iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world."

READ: Clash of the media titans and how the bidding war unfolded 

Disney and Comcast are vying for assets including the Twentieth Century Fox film and TV studio as well as the US cable networks and regional sports channels.

Outside the US, operations including Sky and Star India are in play along with Fox’s one-third stake in the streaming service Hulu.

Not on the auction block are Fox News, Fox Sports 1, the Fox broadcast network or its television stations.

Irrespective of who eventually wins, the assets would be spun off into a new company, for the moment, dubbed New Fox.

In London, Sky shares were 3.3% higher at 1,382p in late afternoon trading.

Neil Wilson, chief market analyst for commented: “Sky shares are trading up 3% today at £13.82 on the news but they could go higher if Comcast really goes big. Even it doesn't have the appetite for all of Fox it could settle to swoop for Sky only and bag those important European subscription revs."

 -- Adds analyst comment, updates share prices --

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