Hedge fund vultures target Sky

As watchdog rules against Murdoch takeover . . .

HEDGE funds will demand Sky News be axed so they can make a quick profit on 21st Century Fox’s takeover of Sky, senior sources claimed last night.

A number of hedge funds have built up a stake in Sky since its £11bn deal with Fox was unveiled. The firms are set to pocket millions when the deal goes ahead.

Yesterday the Competition and Markets Authority said Fox’s bid to buy Sky would place too much of the UK media in the hands of Rupert Murdoch, Fox’s chairman. He already owns The Sun, The Sunday Times and The Times newspapers, as well as Talk Sport radio through his News Corp empire.

The deal would also give the 86-yearold mogul control of Sky News.

The CMA said it would not approve Fox’s bid to buy Sky unless measures were taken to guarantee the future and independence of Sky News.

However, senior figures at Sky fear hedge funds will put the board under pressure to sell – or even axe – Sky News to ensure the Fox takeover goes through.

These vulture investors are not concerned about issues of media ownership, or the damage done to the UK by losing a major news channel, but rather in boosting profits.

Sky executives are ready to fight off the hedge funds as the Murdoch family are committed to the news channel. As a result, Fox is ready to develop a plan to put Sky News into an independent trust. Bosses at Fox are keen to see the takeover of Sky approved because of a separate £39bn merger with Disney.

Sky News was Britain’s first 24-hour news channel and regulators believe it offers a quality alternative to other outlets such as the BBC – which dominates audience shares – ITV and Channel 4. The CMA suggested Sky News’ future and independence could be achieved through selling it, spinning it out into an independent trust or company, or putting up ‘Chinese walls’ to insulate it from Fox.

Privately bosses at Sky were relieved by the ruling, as it was feared a decision over whether Murdoch ownership passed a ‘fit and proper’ test would have scuppered the takeover altogether.

Head of Sky News John Ryley yesterday told staff that a closure of the channel was not planned and had not been discussed.

MPs yesterday called for the takeover to be blocked altogether, with Labour’s Ed Miliband claiming it represented a ‘backdoor attempt’ by Murdoch to gain control of Sky News.