Murdoch bids £11bn for Sky
RUPERT Murdoch has made a controversial £11billion bid for British broadcaster Sky – five years after being forced to abandon a takeover at the height of the phone hacking scandal. The Australian media tycoon’s 21st Century Fox has agreed a price with the directors of the pay TV giant, who will now recommend the deal to shareholders.
Last night former business minister Vince Cable, who led opposition to the original bid, warned it posed a ‘genuine threat to media plurality’ but questioned whether Theresa May’s Government will ‘stand up to the Murdochs’.
Mr Murdoch controls 21st Century Fox, which already owns a 39.1 per cent stake in Sky. His offer means Fox would pay £11.25billion for the stake it does not already own.
The offer of £10.75 per share – 36 per cent more than the closing price on Thursday night – values the broadcaster at £18.5 billion.
Sky revealed the tentative agreement to the stockmarket yesterday afternoon, prompting its share price to soar almost 27 per cent to just under £10.
The broadcaster warned that some ‘material’ terms were yet to be decided and there was no certainty a formal offer will be made.
Mr Murdoch’s son, Fox chief executive James Murdoch, was named chairman of Sky earlier this year, fuelling speculation the US media company would make a bid.
The recent slump in Sky’s share price due to strong competition from rivals such as Amazon and Netflix has also led to predictions Rupert Murdoch might try to pick up the remainder of the broadcaster on the cheap.
But the second attempt by the Murdoch dynasty to wrest control of Sky is likely to face fierce opposition from MPs, and will be scrutinised closely by regulators and ministers.
Mr Murdoch is already a dominant force in the media, owning The Sun and The Times in the UK.
Dr Cable, who referred the original takeover bid to Ofcom in 2010, said last night the Government had a duty to vet big media takeovers to ensure they were in the public interest.
He said: ‘The way Theresa May’s Government deals with this is a test of their independence from the influence of large proprietors. The consultation that has been launched on the implementation of Leveson would suggest there is a tendency for some to bow to the power of media giants – this must not be the case.’
Mr Murdoch’s original bid for Sky was abandoned in the summer of 2011 in the wake of widespread opposition from MPs of all parties.
They said sole ownership of the broadcaster combined with his newspaper interests would give Mr Murdoch too much power and influence.
The deal was also affected by fallout from the phone hacking scandal at Mr Murdoch’s News of the World paper.
Mr Murdoch’s News Corporation was split into two divisions in June 2013. The entertainment arm became 21st Century Fox, while the newspaper publishing arm in Britain became News UK.
‘Test of their independence’