Sky’s the limit for Fox
21st Century Fox announced on Wednesday that it has upped its bid for UK broadcaster Sky to $32.5 billion (£24.5 billion).
Fox has been deadlocked in a bidding war with Comcast over Sky since April, and this most recent bid eclipses Sky’s by 12 percent. In fact, it’s 30 percent larger than Fox’s original bid for it back in 2016.
Even if Comcast doesn’t fire back with a raised offer, Fox still needs the approval of the UK government. Fox will need to sell Sky News to a third party, as British regulators worry that the acquisition of their news arm would give Fox too much control over news media in the UK.
The acquisition of Sky will allow Fox to better position itself against growing media platforms like Netflix and Amazon (Fox already owns part of Hulu), which continue to gain in popularity at the expense of cable.
The deal is also interesting because of Comcast’s and Disney’s bidding war for Fox. If Fox acquires Sky and Disney acquires Fox, then Disney will gain another powerful asset in its arsenal. However, Fox might demand more from its bidders if this acquisition goes through. Because Sky will make Fox worth significantly more, Disney or Comcast will have to adjust accordingly.
Shares of Sky dropped 0.5% yesterday, meaning that investors likely want a higher bid than Fox is offering. Nonetheless, if this deal goes through, it will mark yet another massive media acquisition in the books for 2018.
Featured image via Wikimedia Commons