Murdoch’s Sky takeover bid is blocked

● Watchdog says £11.7 billion deal would give media mogul too much UK control

Rupert Murdoch’s £11.7 billion takeover bid for Sky has been provisionally blocked by the competition watchdog due to fears it would hand the media mogul too much control over Britain’s media.

The Competition and Markets Authority (CMA) said it found 21st Century Fox’s deal to buy out the remaining 61 per cent of Sky it did not already own was “not in the public interest”.

An investigation found if the deal went ahead it would hand the Murdoch Family Trust, which controls Fox and News Corp, “too much control over news providers in the UK across all media platforms ... and therefore too much influence over public opinion and the political agenda”.

News Corp is the publisher of both the Sun and the Times.

The investigation cleared the deal on the grounds of Fox’s commitment to broadcasting standards, in spite of the phone-hacking scandal at the Murdoch-controlled News of the World tabloid and allegations of sexual harassment at Fox News in the US.

But the CMA said its concerns over the impact on media plurality in Britain meant that overall it believed the deal was against the public interest. The provisional decision could thwart Mr Murdoch’s plans to take full ownership of Sky for the second time. His first attempt was abandoned following the phone-hacking saga that led to the closure of the News of the World seven years ago.

It also adds a complication to Walt Disney’s recently agreed £47bn takeover of 21st Century Fox’s entertainment assets, including Sky.

The CMA has put forward suggestions for how it believes Fox could address its concerns. They include spinning off Sky News or “behavioural” changes to protect Sky News from direct influence from the Murdoch Family Trust.

Newly-appointed Culture Secretary Matt Hancock will then decide whether to block the deal, approve it or approve it with conditions.

Sky News has held an emergency staff meeting and a question-and-answer session for employees this morning following the CMA decision.

Sky signalled in a submission to the CMA last year Sky News faced the risk of closure or being spun-off if media plurality concerns prevented the Fox deal going through.

Fox said it was “disappointed” at the provisional ruling. The company said it would continue to engage with the CMA ahead of the publication of its final report, now put back to 1 May. It added it still expects regulatory approval of the deal by 30 June.

Shares in FTSE 100-listed Sky rose nearly 3 per cent after the provisional ruling in a sign investors are betting on the deal eventually going through.

Anne Lambert, chairwoman of the CMA’S independent investigation group, said: “Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

The CMA said the Murdoch’s news outlets are “watched, read or heard by nearly a third of the UK’S population”.