Disney may be forced to submit Sky bid if Fox deal rejected

The United Kingdom's Panel on Takeovers and Mergers announced Thursday that the Walt Disney Company, which is currently pursuing a bid to take over 21st Century Fox' s entertainment assets in the United States, will be forced to submit a bid for Sky Broadcasting should the competition authority block Fox's bid for plurality concerns.

Why it matters: Disney would have to submit a bid for Sky for at least 10.75 pounds per share upon completion of its $52 billion merger with 21st Century Fox — the same price Fox offered when initially pursuing the merger in 2016. This means that Sky shareholders may not anticipate a higher bid from Disney, but assures them they have a bidder of equal value if the competition authority blocks Fox's efforts.

In a statement, 21CF says it's "21CF remains committed to its recommended cash offer for Sky announced on 15th December 2016."

• The panel notes that all three parties have agreed to these terms.
• The panel says Disney needs to submit a bid for the broadcaster because it would acquire a 39% stake of Sky News through its acquisition of Fox, suggesting it doesn't want to keep ownership divided of its popular broadcaster.

Note: This doesn't take into account whether Comcast Corporation formalizes a bid in time to for Sky as well. Comcast says their bid would be significantly higher than Fox's original bid. Should the deal fall through and Disney is force to submit a bid, they could face some stiff competition for the broadcaster from Comcast.