Jun 27, 2018

Hedge funds push regulator to set Sky floor price

Hedge funds are pushing the UK Takeover Panel to set a new floor for the fair value of Sky, after Walt Disney disclosed new internal figures that showed expectations of a sharp jump in the profitability of the pan-European media group. That deal values Fox at $71.3bn not including net debt, up from a previous deal worth $52.4bn. Sky shareholders have become vocal over their view that the UK company is worth more than the sum being offered by either Disney, which has been forced to bid for Sky as part of its deal to acquire Fox, or Comcast. They want the panel to set a new floor on the value of Sky that reflects the latest Disney offer as well as improvements in Sky's operating performance, thanks to its recent success in securing rights to the English Premier League at a price lower than most analysts had expected. "The argument is over how much of Disney's new offer to Fox should be ascribed to Sky," said one large Sky shareholder. "We are in somewhat uncharted territory as to how the regulator might model the necessary bump to Sky shareholders implied via the improvement offered to Fox.".

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