21st Century Fox and Comcast will have a busy weekend as the two engage in an auction to determine the winner of U.K. pay TV operator Sky, valued at about $35 billion.
The companies have been battling over Sky for months now. In July, Fox raised its bid for the part of Sky it doesn’t already own. Comcast came back with a £14.75-per-share bid for 60% of Sky, a transaction with an implied value of $34 billion at the time. That bid allowed Comcast to jump out ahead of Fox’s $32.5 billion, or £14 per share, offer tendered earlier in the day, and Comcast's new bid earned the recommendation of the Sky Independent Committee of Directors.
“Comcast has long admired Sky and believes it is an outstanding company and a great fit with Comcast. Today’s announcement further underscores Comcast’s belief and its commitment to owning Sky,” Comcast said in a statement.
Now, considering that neither Comcast nor Fox have declared their offers final, the U.K. Takeover Panel will initiate an auction for Sky, which will kick off at 5 p.m. London time on Sept. 21 and wrap up on Sept. 22.
The auction will consist of a maximum of three rounds. In the first round, only the bidder with the lowest offer may make an increased bid. In the second round, only the bidder that was not eligible to make a bid in the first round may make an increased bid. If the auction procedure has not concluded after the second round (which it will if no increased bid is made in the second round), there will be a final round, in which both bidders may make an increased bid.
This procedure will play out amid Disney’s ongoing acquisition of many of 21st Century Fox’s assets, including its ownership stake in Sky. As the The Wall Street Journal points out, since Fox already owns a significant part of Sky, it has an interest in driving up the bids in case it decides to sell its stake to Comcast.