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21st Century Fox files €24.5bn formal Sky offer

By Ian King, business presenter
The takeover battle for Sky plc, the owner of Sky News, has taken another turn as 21st Century Fox, one of the two companies vying for control of Europe's largest pay-TV broadcaster, posted its offer document.
The move sets the clock ticking on Fox's offer for Sky under the City's takeover code.
But Fox, which currently owns a 39.1% stake in Sky, did not - contrary to some expectations in the City and the media - increase its current €14-a-share offer.It has until 22 September in which to do that under the takeover timetable.The US entertainment giant, whose current offer values the whole of Sky at €24.5bn, is fighting it out with Comcast, the US cable operator, for control of Sky.Fox also tweaked the way in which its offer has been constructed.Previously, the company had been seeking to take control of Sky via what is known as a "Scheme of Arrangement".Under this arrangement, the takeover process is concentrated into a shorter period of time.Instead, Fox will now seek to take control via a conventional takeover.It said it would still be seeking to win acceptances for its offer from three-quarters of Sky's independent shareholders before declaring the takeover unconditional.Comcast, by contrast, has said it would be satisfied with a simple majority of Sky's shares - meaning that it could take control with 50% of the shares plus one further share.Fox's requirement for a higher level of acceptances will be regarded as risky in some quarters, because of the high proportion of hedge funds and other speculative buyers now owning its shares.But Fox insisted this evening that it reserved the right to reduce its acceptance condition from 75% of all shares owned by other investors to a simple majority - which would include its existing 39.1% stake.Dropping the scheme of arrangement also means that Fox does not require the co-operation of Sky's board.
21st Century Fox files €24.5bn formal Sky offer

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21st Century Fox's approach will now not require the co-operation of Sky's board
Under a scheme of arrangement, a level of co-operation is required from the target company, which has to send the scheme circular to shareholders.
Sky's independent directors are trying to get an auction going and so it would be unhelpful for the company to have to do this.They have said they will formally respond to the Fox offer document "within 14 days."Comcast, which has media assets including the NBC television network and the Universal Picture film studio, is currently in pole position.It raised its offer to 1,475p-a-share, or €26bn in total, just hours after Fox tabled its latest offer last month.The offer has been recommended to Sky shareholders by a committee of the broadcaster's independent directors.Fox is currently in the process of selling its entertainment assets, including its shareholding in Sky and the Hollywood studio behind hits such as the X-Men and Avatar, to Disney.The pair agreed a $65bn deal in shares just before Christmas last year, but Comcast subsequently made a rival offer of $66bn in cash for those assets - prompting Disney to sweeten its terms to $85bn, including debt, in cash and shares.Comcast subsequently abandoned its interest in the Fox assets - prompting some to speculate that Disney might in return offer it a free run for ownership of Sky.The timing of the posting of the offer document may take some in the City by surprise.Fox was not required to do so until Thursday at the latest.Analysts believe that Fox has deliberately decided not to raise its offer at this stage of proceedings in order to retain the flexibility to do so later in the takeover battle.
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Fox and Disney, like Comcast, have made legally binding commitments to preserve the editorial independence and funding of Sky News.The offer document was posted following the close of trading on the stock market. Shares of Sky had earlier closed up 4.5p at 1520p.
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