Disney offers to buy Sky News
• Fox proposes separation deal to appease regulators
Rupert Murdoch has stepped up the pressure on Britain to approve his $14.5bn bid for Sky by offering to sell or legally separate Sky News, seeking to allay concern about the 87-year-old mogul’s political influence.
Murdoch’s Twenty-First Century Fox said on Tuesday Sky News could be sold on to US rival Walt Disney or become a legally separate business within the Sky group.
Fox agreed in December 2016 to buy the 61% of European pay-TV group Sky it does not already own, but the deal has been repeatedly delayed by the UK government and regulators.
Fox had already promised that Sky’s 24-hour news service would remain independent under the control of Murdoch, but critics, including high-profile politicians, remain opposed due to Murdoch’s record of influence through owning The Sun and The Times newspapers.
The delay enabled US cable company Comcast to gatecrash the deal in February by saying it would offer £12.50 a share to buy Sky, compared with Fox’s £10.75, although it has not yet made a formal bid. As the Sky deal remained in regulatory limbo, Fox separately agreed to sell a string of assets, including its 39% stake in Sky, to Disney, potentially taking Murdoch out of the Sky equation.
Fox said on Tuesday its new concessions went beyond the steps that Britain’s media regulator Ofcom said would mitigate concern about Murdoch’s influence. The company, however, needs to persuade another regulator, the Competition and Markets Authority (CMA), and the government.
“We have worked diligently with the CMA throughout its extensive review,” Fox said. “In fact, we believe that the enhanced firewall remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA’s provisional concerns.”
Fox said it could legally separate Sky News within the wider Sky group, so it would operate independently with guaranteed funding for 15 years. Alternatively, it said Disney had expressed an interest in acquiring the 24-hour news channel, whether or not Disney’s proposed acquisition of TwentyFirst Century Fox went ahead.
Sky shares were up 0.9% at £13.09 on Tuesday, above both the agreed offer from Fox and the proposed bid by Comcast.
Analysts at Liberum said Fox’s latest concessions should be enough to secure approval. They also said that two factors pointed to Fox coming back with a revised bid to match Comcast.
First, Fox must have received approval from Disney to offer the concession, they said, and second, Sky said its independent directors remained focused on maximising shareholder value.
News on Tuesday that Sky Italia had finally settled its fight with Mediaset in the Italian payTV market also made Sky more valuable, they said.
A group of high-profile British MPs, including former Labour Party leader Ed Miliband, called in March for Murdoch to be blocked from buying Sky, despite the promises Fox had made to ensure the independence of Sky News.
THE CONCESSIONS WENT BEYOND THE STEPS THAT BRITAIN’S MEDIA REGULATOR SAID WOULD MITIGATE CONCERNS