Murdoch offers to sell Sky News to Disney to win pay-TV prize
RUPERT Murdoch ratcheted up the pressure on Britain to approve his $15 billion-plus bid for pay-TV group Sky by offering to sell or legally separate Sky News, aiming to head off objections the deal could give him too much political influence.
Mr Murdoch’s Twenty-First Century Fox said on Tuesday that Walt Disney Co was interested in buying Sky News. Alternatively, Fox said, Sky News could be legally separated within the Sky group.
Even if Fox’s proposals satisfy Britain’s government and competition regulator, however, it may still need to raise its recommended offer for Sky after US cable group Comcast Corp said it intended to make a higher counter-bid.
Sky shares rose 2.1 per cent to £13.25, the biggest gain on Britain’s FTSE-100 index and above both Fox’s bid and Comcast’s proposed offer, signalling investors expect any suitor will have to pay more.
Money-losing Sky News is the last regulatory hurdle in Mr Murdoch’s long campaign to buy Sky, which has grown from its UK beginnings to become Europe’s biggest pay-TV group.
Fox agreed in December 2016 to buy the 61 per cent of Sky it does not already own, but the deal has been repeatedly delayed by the UK government and regulators, allowing Comcast to gatecrash the deal in February.
Fox had already promised that Sky’s 24-hour news service would remain independent under the ultimate control of Mr Murdoch, but critics, including some high-profile politicians, remain adamantly opposed due to his record of influence through owning the Sun and the Times newspapers.
As the Sky deal remained in regulatory limbo, Fox separately agreed to sell a string of assets, including its 39 per cent stake in Sky, to Disney, potentially taking Mr Murdoch out of the Sky equation.
In a statement on Tuesday, Disney said the Sky News deal would be “separate from, and not conditional on, Disney’s acquisition of Fox [assets].” Disney also said it would “agree to sustain the operating capital of Sky News and maintain its editorial independence.”
Some Sky shareholders, frustrated by the delay, had already said Fox should increase its £10.75-per-share offer.
Their view appeared vindicated when Comcast said it would pay £12.50 a share to buy Sky, although it has not yet made a formal bid.
Fox said its new concessions went beyond the steps that Britain’s media regulator Ofcom said would mitigate concerns about Mr Murdoch’s influence. The company, however, needs to persuade another regulator, the Competition and Markets Authority (CMA), and the government.
A CMA spokeswoman said on Tuesday it had until May 1 to provide its report on the proposed deal to Britain’s secretary for digital matters, culture, media and sport. Secretary Matt Hancock, is due to make the final decision by June 13.