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CEO, Manalo LLP

Roderick Manlo

Manalo LLP

We provide event driven research services to hedge fund managers and institutional investors that cover select definitive and pre-announced M&A deals, focusing on identifying and analysing the key upside and downside risks to a particular transaction. We primarily analyse $billion+ takeovers or mergers of publicly-traded European targets, but also look at deals globally to assess when there is a key European angle or aspect that can influence the deal outcome.

With over 16 years’ experience in risk arbitrage and investment banking, we specialise in providing research and advisory services on all facets of risk arbitrage, with particular expertise in:

- Cross-Border M&A
- Hostile Takeovers
- Local Takeover Codes
- Antitrust & Competition
- Financial Valuation
- Shareholder Vote Analysis
- Impacts of Precedent Transactions
- Risk Arbitrage Trading Strategies

Event-Driven

Sky shares have recently been driven by the effects of the UK general election (8-Jun-17), where a hung parliament result has led to the increased deal uncertainty, Secretary of State (SoS) Karen Bradley’s receipt Ofcom’s report (20-Jun-17), where she delayed her decision but suggested a future “opportunity of representations”, and the SoS’ ‘minded to’ decision (29-Jun-17), where she hinted that she would not accept Fox’s proposed UILs in their current form. Navigating through the permutations of each of these events has not been easy, especially in the face of headline nervousness over the precariousness of Theresa May’s position as Prime Minister (PM), and on whether the Conservatives’ agreement with the Democratic Unionist Party (DUP), signed two weeks ago, will keep the Tories in government for the remainder of the deal. While most event driven funds remain rightly fixated on the short-term outcome of the SoS' acceptance of any further representations made by Fox ahead of its 14-Jul-17 deadline, namely as it relates to a separation from Sky News to address media plurality concerns, we must consider longer-term political aspects since these will affect the deal whether or not we enter into a CMA Phase II review. In this note we provide some background information on the UK legislative framework which enables a new general election to be called, and how the Conservatives, and Theresa May, will try to hold on to power for the next five years (let alone until Sky / Fox closes, which we believe will be in February 2018). We include insights on the deal impacts and likely risks if Karen Bradley is replaced as SoS following a future cabinet reshuffle, or in the event of a Labour general election win.

Sky shares have recently been driven by the effects of the UK general election (8-Jun-17), where a hung parliament result has led to the increased deal uncertainty, Secretary of State (SoS) Karen Bradley’s receipt Ofcom’s report (20-Jun-17), where she delayed her decision but suggested a future “opportunity of representations”, and the SoS’ ‘minded to’ decision (29-Jun-17), where she hinted that she would not accept Fox’s proposed UILs in their current form. Navigating through the permutations of each of these events has not been easy, especially in the face of headline nervousness over the precariousness of Theresa May’s position as Prime Minister (PM), and on whether the Conservatives’ agreement with the Democratic Unionist Party (DUP), signed two weeks ago, will keep the Tories in government for the remainder of the deal. While most event driven funds remain rightly fixated on the short-term outcome of the SoS' acceptance of any further representations made by Fox ahead of its 14-Jul-17 deadline, namely as it relates to a separation from Sky News to address media plurality concerns, we must consider longer-term political aspects since these will affect the deal whether or not we enter into a CMA Phase II review. In this note we provide some background information on the UK legislative framework which enables a new general election to be called, and how the Conservatives, and Theresa May, will try to hold on to power for the next five years (let alone until Sky / Fox closes, which we believe will be in February 2018). We include insights on the deal impacts and likely risks if Karen Bradley is replaced as SoS following a future cabinet reshuffle, or in the event of a Labour general election win. 

Sky / Fox: UK Political Impacts and Risks of a New General Election

Sky PLC

Sky / Fox: UK Political Impacts and Risks of a New General Election