Disney eyes bankers as it weighs options in Sky bidding war
Walt Disney Co. has indicated that it will hire even more investment bankers as it finds itself in the middle of what looks like a bidding war between 21st Century Fox and Comcast for Sky Plc.
It’s the latest twist in an increasingly complex dance of some of the world’s biggest media companies and a slew of Wall Street advisers involved in the sale of the British satellite broadcasting giant, FOX Business has learned.
People with direct knowledge of Disney’s intentions say the company has indicated that it will retain Citigroup, in addition to JPMorgan Chase and Guggenheim, as it weighs how the various scenarios might play out.
Comcast announced earlier this week that it had submitted a $30.7 billion counteroffer to buy Sky. The move would upend 21st Century Fox’s previously announced bid to buy the remaining piece of Sky that it doesn’t own and then sell the British broadcaster to Disney, which agreed to purchase a chunk of Fox’s assets.
The bid from Comcast came at a premium above what Fox was willing to pay and forced Sky’s independent directors to withdraw their previous support for the Fox offer. Disney has in the past said it considers Sky an integral part of its purchase of Fox assets, and according to bankers with knowledge of the deal, Disney is now looking at all its options.
It could be using the additional advisers merely as a way to monitor the bidding war between 21st Century Fox and Comcast, according to bankers. 21st Century Fox, the parent of Fox News and FOX Business, may soon announce a higher bid for the broadcaster to wrest control of Sky from Comcast. But Disney may also place its own bid for Sky, further complicating the bidding war, the bankers add.
Disney may also use the bankers to buy the Sky News subsidiary of the broadcaster as a way to assuage regulatory concerns in Europe over the concentration of news assets at 21st Century Fox. Sky News is Sky Plc’s 24-hour news channel – the first of its kind in the U.K.
A spokesman for Fox and Comcast had no comment. A spokeswoman for Disney didn’t return calls for comment. A press representative for Sky had no immediate comment. Fox has said in the past it is considering its options on how to respond to the higher Comcast bid.
One thing is certain: The myriad of scenarios that could play out around the bidding war for Sky has made the deal potentially one of the biggest paydays for Wall Street in recent memory. Bankers say tens of millions of dollars in fees could be generated depending on how long the bidding war lasts, and many of the biggest firms on the Street have been tapped to advise the various players. 21st Century Fox, for instance, is being represented by Goldman Sachs, Centerview Partners and Deutsche Bank, people with knowledge of the matter say.
The PR firm Sard Verbinnen, which Fox has had on retainer for years, has also worked on the deal, these people add. A Sard spokeswoman didn’t return a call for comment.
Comcast is being represented by Evercore, Bank of America and the London-based boutique Robey Warshaw, while Sky is being represented by Morgan Stanley, Barclays Plc and PJT Partners.
The bankers may be necessary given the stakes involved. Both Disney and Comcast covet access to Sky’s viewers, estimated at around 23 million in countries throughout Europe. 21st Century Fox Executive Chairman Rupert Murdoch has also made purchasing the remaining piece of Sky the company doesn’t own a top priority given Sky’s profitability and its importance now to the Disney deal. Comcast even made a run at Fox’s assets including Sky, but was rebuffed, and the Disney bid prevailed.
Murdoch was forced to withdraw a past attempt to purchase Sky because of regulatory concerns.