Fox Plans Higher Bid for Sky Ahead of U.K. Approval

[idpickering]

21st Century Fox Inc. is preparing a higher offer for Sky Plc to counter Comcast Corp., according to people familiar with the matter, marking the latest twist in a global M&A contest between some of the world’s largest media companies.

The move is likely to come around the time of the formal approval by Britain for Fox’s bid, which is expected to come as soon as this week, said the people, who asked not to be identified as the deliberations are private

https://www.bloomberg.com/news/articles ... -seen-near

[kempiejon]

Ian, thanks for the note, explains the increase seen today.
This is frustrating, the price keeps going up! It has dented my income for the past few years but the eventual release of capital looks like it will compensate me but the wait has been my frustration. I did sell my unsheltered holdings a few months back and turned them into income shares again as part of my year end tax planning.

[idpickering]

Ian, thanks for the note, explains the increase seen today.
This is frustrating, the price keeps going up! It has dented my income for the past few years but the eventual release of capital looks like it will compensate me but the wait has been my frustration. I did sell my unsheltered holdings a few months back and turned them into income shares again as part of my year end tax planning.

You are most welcome kempijon. I did hold Sky some years ago for a short while, and can’t remember why I sold out. Probably one of my Bestest Dad things?

Ian.

[OLTB]

Ian, thanks for the note, explains the increase seen today.
This is frustrating, the price keeps going up! It has dented my income for the past few years but the eventual release of capital looks like it will compensate me but the wait has been my frustration. I did sell my unsheltered holdings a few months back and turned them into income shares again as part of my year end tax planning.

I also hold Sky and this has been such a protracted state of affairs! I have missed the dividends, however, the resulting capital gain is compensation and, as you mention in your post, will allow me to re-invest the cash in a new share and increase the current dividend flow. I only hope that the new Sec of State for DCMS, Jeremy Wright (as of yesterday) isn't going to hold anything else up by wanting to have a full review of the conclusions Matt Hancock had come to after the final consultation. Judging from Sky's new planned bid, they think not.

Cheers, OLTB.

[idpickering]

Murdoch's Fox agrees $32.5 billion bid for Sky

Rupert Murdoch's 21st Century Fox (FOXA.O) said it had agreed a deal to buy Britain's Sky (SKYB.L) with an offer valuing the pay-TV group at $32.5 billion, trumping rival bidder Comcast (CMCSA.O).

Fox, which is expecting to get regulatory approval from Britain this week after striking an initial deal with Sky in December 2016, upped its offer to 14 pounds per share, from its earlier 10.75 pounds per share.

https://finance.yahoo.com/news/murdochs ... 24466.html

[pyad]

1,400p is a dumb reply to Comcast's 1,250p cos it's actually below the market price which has been over that 1,400p for about the last three weeks and is now just over 1,500p after today's new bid.

So WTF would accept 1,400p when they can sell in the market for more? Bids are made at a big premium to the market price, not below it!

I have no idea whether Comcast will come back with an even higher bid, but that's what the market thinks. Not that I care what the market thinks.

Whilst this bid seems interminable due to the incredibly dilatory government interference which makes procrastination look like haste, the outcome from the HYPer's approach of doing nothing looks like it will pay off well. SKY suspended dividends for a while under the original Fox bid terms back in December 2016 and resumed this year.

Although the income from SKY since the original bid has therefore been less than outstanding, the eventual bid premium looks like it will be so high that it will enable reinvestment to produce compensating additional income over that which could have been obtained by selling in the market after the first bid of 1,075p and reinvesting that sum.

Kinda makes you feel sorry for those who tinkered SKY away at some earlier stage after the first bid, thinking they could improve on the income by reinvesting in a new HY share. They could, but by nowhere near as much as they will be able to achieve by doing nothing.

[YeeWo]

Kinda makes you feel sorry for those who tinkered SKY away at some earlier stage after the first bid, thinking they could improve on the income by reinvesting in a new HY share. They could, but by nowhere near as much as they will be able to achieve by doing nothing.

Guilty. I sold 17 Mar 17 @ 9.90.

[Gengulphus]

1,400p is a dumb reply to Comcast's 1,250p cos it's actually below the market price which has been over that 1,400p for about the last three weeks and is now just over 1,500p after today's new bid.

So WTF would accept 1,400p when they can sell in the market for more? Bids are made at a big premium to the market price, not below it!

No-one sensible would accept 1,400p - at the moment!

But Fox is interested in bidding above what Comcast are willing to pay, though as little above it as reasonably possible. They're not interested in bidding enough to give speculators who bet on a continued bidding war a profit - in fact, they would probably be quite happy to inflict a loss on their bets, to discourage them from trying to drive future takeover prices up...

And of course, Comcast are interested in bidding above what Fox is willing to pay, though as little above it as is reasonably possible. And the market price may well continue to rise ahead of both companies' bids, until either one bidder gives up or the Takeover Panel intervene to demand that the bidders make their final bids. At that point, if the market price is still above the highest bid, it will probably drop quite rapidly to just below it...

If so, those who choose to sell on the market just before that happens will do best out of this takeover, because they'll benefit not only from the highest bid, but also from the losses of the speculators. But reading that well requires short-term trading skills that aren't in a HYPer's usual repertoire!

Gengulphus

[PinkDalek]

It would appear that Comcast have topped Fox, with an increased offer of £14.75 per share:

https://uk.reuters.com/article/us-sky-m ... KKBN1K10KU

[idpickering]

This from TMF offers some thoughts on this saga;

What can investors learn about the Sky takeover saga?

I read a comment Wednesday on how nice it is to own something that two very wealthy bidders want to get their hands on.

We’re talking about Sky (LSE: SKY), and the long-running takeover saga has taken a further step after Rupert Murdoch’s 21st Century Fox raised its offer to value the company at £24.5bn. The bid trumps Comcast’s previous valuation of £22bn, which itself eclipsed Mr Murdoch’s original offer.

https://www.fool.co.uk/investing/2018/0 ... over-saga/

[pyad]

Why link TMF here? It gives the impression that their views are somehow superior to those of other commentators which is not the case at all.

Anyway, this has become a classic bid battle, the likes of which are pretty rare and wonderful of course for those like me who have held SKY throughout and have done just nothing as is the HYPerway.

Is 1,475p the end of the story?

Is it enough for Comcast to wipe out Fox?

Will Fox come back with even more?

I don't have the remotest idea but as a SKY holder I hope this one will run and run...

Do we care who wins? (No)

The only regret is that government interference dragged the whole gig out by maybe a year longer than should have been the case.

[Breelander]

Why link TMF here?....

Nostalgia?
These days I check who the author is before deciding whether to bother reading a link. Alan is one of the 'old-school' of writers.

[idpickering]

Why link TMF here? It gives the impression that their views are somehow superior to those of other commentators which is not the case at all.

I get where you're coming from Stephen, but I do disagree that my posting the item here gives the impression that the author(s) are superior at all. For me, I learnt a lot from TMF, including from your good self, so I do like to read some of their offerings. I also like to share that information with the gang here. If people don't want to read the item, then don't, but at least respect the right of others to do so, should they so wish. If there was an issue, one of the LF Mods would've flagged the matter up.

Ian.

[Gengulphus]

Why link TMF here?....

Nostalgia?
These days I check who the author is before deciding whether to bother reading a link. Alan is one of the 'old-school' of writers.

Well, normally I'd agree with you - it's far more likely that an article by a specific named author will attract me to click a link than that a generic "TMF article" will do so, and I've generally found Alan Osborne worth reading. But I do wonder what happened in the linked article to lead to his statement that "But nothing has yet come to pass, and Vodafone shares have suffered over the past five years — from a high in February 2014, we’ve seen a 40% fall to today’s 25p level"! Not a single one of the supposed facts that it contains is correct: the Vodefone share price is nowhere near 25p (thanks goodness!), it's fallen less than 10% since five years ago, its peak over the last 5 years was about 255p around May 2015 and it's fallen about 30% from that peak. Some of those discrepancies might be due to using a different adjustment for the complex return of capital, demerger and share consolidation in February 2014 following on from the Vodafone/Verizon deal, but not all of them: in particular, the 25p share price is sheer nonsense - I can't even see a plausible typo that would produce it! All I can think is that Alan or his editor had a brainstorm...

Gengulphus

[PinkDalek]

I usually enjoy Alan Oscroft's writing as well, despite the occasional error. It would help though if any references to TMF named the author.

In addition, that article was yesterday's news. I'd already updated the thread to reflect the latest increased offer by Comcast.

[idpickering]

Rest assured, they'll be no more linking TMF items on these boards from me any more. It's not worth the hassle, nor my time. Don't know why I bother.

Ian.

[Gengulphus]

Well, normally I'd agree with you - it's far more likely that an article by a specific named author will attract me to click a link than that a generic "TMF article" will do so, and I've generally found Alan Osborne worth reading. But I do wonder what happened in the linked article to lead to his statement that "But nothing has yet come to pass, and Vodafone shares have suffered over the past five years — from a high in February 2014, we’ve seen a 40% fall to today’s 25p level"! Not a single one of the supposed facts that it contains is correct: the Vodefone share price is nowhere near 25p (thanks goodness!), it's fallen less than 10% since five years ago, its peak over the last 5 years was about 255p around May 2015 and it's fallen about 30% from that peak. Some of those discrepancies might be due to using a different adjustment for the complex return of capital, demerger and share consolidation in February 2014 following on from the Vodafone/Verizon deal, but not all of them: in particular, the 25p share price is sheer nonsense - I can't even see a plausible typo that would produce it! All I can think is that Alan or his editor had a brainstorm...

And I seem to have had one myself, getting Alan Oscroft's surname wrong and misspelling "Vodafone"!

Gengulphus

[pyad]

Rest assured, they'll be no more linking TMF items on these boards from me any more. It's not worth the hassle, nor my time. Don't know why I bother.

Ian.

Ian it was purely your TMF linking which I and others criticised, not your other contributions which are welcome. So no need to take offence over that.

Back on topic, SKY for the moment has levelled off at around 1,540p meaning the market expects Fox to over bid Comcast's 1,475p. But the market won't always be right.

The interesting conundrum for HYPers of a tinkering persuasion in this share is whether to sell at the market price or wait for a possibly higher bid price. From some messages here, and many other HYPers who don't post here. it's the same problem as prevailed at earlier much lower price levels. Not selling has paid off handsomely but that doesn't mean this will continue to be the case.

For me and those who follow my HYP method we avoid any such difficulties because we don't sell (except in certain very rare technical circs). We just let Market Trading do it for us.

[idpickering]

Thank you Stephen. Still no more TMF from me going forward, now let’s move on.

Ian.

[moorfield]

The interesting conundrum for HYPers of a tinkering persuasion in this share is whether to sell at the market price or wait for a possibly higher bid price.

Some of us have put rules around this based on yield relative to the "market" or some such benchmark. In my case, I would crystallize on a chunky SP rise that pushes the yield under 1/2 of City Of London IT, ie. under about 2%, and recycle elsewhere.