Dec 17, 2017

Fund claims Sky investors could lose out in Disney-Fox deal

A hedge fund with a small stake in Sky has complained that Walt Disney's takeover of 21st Century Fox could cost minority shareholders in the UK satellite broadcaster a hefty premium unless the regulator intervenes. Reade Griffith, co-founder of the Polygon hedge fund which owns less than 1 per cent of Sky, has contacted the Takeover Panel to argue that Disney's acquisition of the Sky stake represents "a significant purpose" of the overall Fox takeover and that the mandatory obligation to bid for the rest of the shares should apply to protect minority Sky shareholders. Mr Griffith argued that Sky investors would be entitled to a higher premium than the Fox offer had Disney bought its 39.1 per cent holding directly but that the two companies have been careful not to put an exact value on the stake directly. The fate of Sky has been up in the air as Fox's offer has been the subject of an extended regulatory review although Disney's proposed acquisition of 21st Century Fox's assets, including the 39 per cent stake in Sky, has eased fears of the deal being blocked. Mr Burki said minority investors were "Uniquely positioned to exert leverage" for a higher price if regulators clear the Fox deal and it would be no surprise to see "Some sort of activism" next year.

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