THE SKY IS THE LIMIT. U.K. Clears Sky Bid. Fox had said it was willing to sell off Sky News, a popular news broadcaster, to gain regulatory approval. By Todd Horwitz, Bubba Trading

 

 

U.K. Clears Sky Bid

The U.K. plans to approve a proposal by Murdoch’s 21st Century Fox Inc. to acquire Sky Plc, the largest pay-tv provider in the country. The move gives Fox the clearance it needs to continue pursuing the transaction — but it’s no done deal. Comcast Corp. has submitted a higher bid for Sky, and U.K. authorities want to ensure that Fox divests the Sky News business if it completes the takeover.
The decision gives fresh life to Murdoch’s second attempt to buy Sky, part of a transatlantic battle for media assets that includes Walt Disney Co. and Comcast. Fox is trying to acquire the 61 percent of Sky it doesn’t already own, while also fending off the Comcast bid. The U.S. cable giant has made an offer that’s 16 percent higher, but Fox now has the OK to increase its bid of 11.7 billion pounds ($15.6 billion).

Investors—including American hedge fund Elliott Management Corp., which has built a 3% stake in Sky—have bet the two could engage in a bidding war if U.K. regulators didn’t get in the way. Shares have been trading well above both suitors’ bids. On Tuesday, Sky shares ended modestly higher at £13.54, about a pound above Comcast’s bid.
The battle for Sky is just one front in the larger contest between Comcast and Disney over the wider collection of Fox assets both covet. But it has taken on outsize strategic importance, in part because of all the possible ultimate outcomes.

British regulators have been examining whether Fox’s full ownership of Sky would give Mr. Murdoch too much influence in British media. Mr. Murdoch and his family are major shareholders in both Fox and News Corp, which publishes three major U.K. newspapers. News Corp also owns The Wall Street Journal. Fox had said it was willing to sell off Sky News, a popular news broadcaster, to gain regulatory approval. The British government is now essentially taking Fox up on that offer, before giving the deal a final green light.

Keep those stops tight
Todd “Bubba” Horwitz

Financial Markets & Political Commentary

 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.