Sky takeover bid faces delay

• Murdoch move may be referred to competition authorities for deeper investigation, British culture secretary says

Rupert Murdoch faces drawn-out negotiations with UK regulators in his effort to take full control of Sky for £11.7bn after the British government said it would refer the bid for additional review unless 21st Century Fox offered steeper concessions.

Rupert Murdoch faces drawnout negotiations with UK regulators in his effort to take full control of Sky for £11.7bn after the British government said it would refer the bid for additional review unless 21st Century Fox offered steeper concessions.

The UK was inclined to refer the offer to the Competition and Markets Authority for a deeper investigation, Culture Secretary Karen Bradley said.

However, she left the door open for a resolution by July 14 that would avoid a review, if Fox strengthened proposals it had made to ensure editorial independence at Sky News.

“The transaction raises public-interest concerns as a result of the risk of increased influence by members of the Murdoch family trust over the UK news agenda and the political process, with its unique presence on radio, television, in print and online,” Bradley said.

While the onus is on Murdoch to resolve the government’s concerns, investors drove Sky shares up, quickly concluding that Bradley had raised no fundamental issues that would preclude the 86year-old billionaire’s attempt to create a transatlantic media and entertainment giant.

While sexual-harassment allegations at Fox News in the US demonstrated significant corporate-governance failures, Bradley said she was not inclined to ask the Competition and Markets Authority to look into the deal’s effects on broadcast standards. Communications regulator Ofcom echoed her findings, saying Sky would remain a fit-and-proper owner of media assets under Fox, a test that could have sunk the deal.

“It’s taken the worst-case scenario off the table,” said Neil Campling, an analyst at Northern Trust Capital Markets.

“The balance of probability is now that it’s more likely that the deal goes through.”

Sky shares advanced 3.2% to 987.5p on Thursday, the biggest gain since the deal was announced in December.

/Reuters String theory: Performers pose outside the British Houses of Parliament, wearing puppet heads of Rupert Murdoch and Britain’s Prime Minister Theresa May.