Fox raises offer for Sky to £24.5 billion

Update includes further detail

21st Century Fox Inc. FOX, +0.53% on Wednesday sweetened its offer for the 61% of U.K. pay-TV group Sky PLC (SKY.LN) that it doesn’t already own, valuing the company at 24.5 billion pounds ($32.5 billion) and topping an existing bid from Comcast Corp. CMCSA, -0.66%

Fox said its all-cash proposal values each Sky share at GBP14, which compares with the GBP12.50 a share in cash offered by Comcast for the whole group. Fox’s previous bid, which was made in December 2016 and has been under the scrutiny of British regulators, valued each Sky share at GBP10.75.

Fox agreed on June 20 to sell most of its assets–including its current 39% stake in Sky–to Walt Disney Co. DIS, +0.01% If Fox buys the remaining stake in Sky prior to closing the Disney deal, Disney would take full-ownership of the British company upon completion of the larger transaction. The Disney offer challenged a prior, unsolicited bid from Comcast, separate from the U.S. cable giant’s pursuit of Sky.

Fox’s move comes before a final decision by the U.K. government’s Department for Digital, Culture, Media and Sport as to whether or not the company will be allowed to continue its bid for Sky, which is expected by July 12. Under Fox’s latest proposal to divest Sky News to Disney, Fox pledged to provide a Disney-owned Sky News channel with funding of at least GBP100 million a year for 15 years. This would meet regulators’ criteria to approve the deal, former Culture Secretary Matt Hancock said last month.

The U.K. government previously held up the Fox bid on media-plurality grounds, citing concerns that it would give the Murdoch family too much influence on U.K. media. The Murdoch family owns a 39% stake in both Fox and in News Corp, which publishes three U.K. newspapers and is the parent company of Dow Jones.

Comcast said on June 15 that it planned to post an offer document to Sky shareholders, after receiving approvals from both U.K. and EU regulators.

Read more about the Sky takeover at (WSJ paywall) or (NewsPlus).

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