Merger Bidding War – Fox News vs Comcast
Over the past year, Fox News and Comcast have engaged in a bidding war over Sky News, a British news network. Fox News currently owns a 39% stake in the company and is looking to acquire the rest in order to sell its stake to Disney (which recently acquired much of Fox News). Comcast intends to gain a foothold internationally. The latest bid by Comcast, at £14.75 a share, values Sky News at $34 billion. Fox’s latest bid was at £14.00 a share. This weekend, British regulators will administer a rapid-fire auction to determine the outcome.
This is a First Price Auction where the winning company pays their bid. Thus, each company will continue to bid until they reach their own value. However, neither company knows the value that the other has placed on Sky News. Absent that knowledge, the dominant strategy of each is to continue to bid until they reach their maximum value and nothing higher. It will be very interesting to see what the final value is determined for Sky News.
Link to article: https://www.wsj.com/articles/comcast-fox-to-settle-35-billion-takeover-battle-for-sky-in-weekend-auction-1537435073?mod=hp_lead_pos4