Fox willing to make concessions to secure approval for Sky bid
london/los angeles — 21st Century Fox, trying to seek government approval for its $15 billion deal for control of Sky, is prepared to make concessions to UK regulators who are scrutinising its suitability as a media owner, according to people familiar with the matter.
The film and television company is willing to negotiate over remedies if necessary, including changes to corporate governance, though it doesn’t expect to be asked for major alterations, said the people, who asked not to be identified discussing private information.
Fox, which already owns 39 per cent of Sky, isn’t considering spinning off Sky News or creating an independent board, one of the people said.
Lawyers representing people who have filed sexual harassment and racial discrimination claims against Fox have been in the UK this week to meet with regulator Ofcom. They argue that Fox, controlled by billionaire Rupert Murdoch, didn’t have the proper oversight to protect employees and shouldn’t be allowed to expand its media ownership.
Investors haven’t wavered in recent weeks in their bets on whether the deal goes through. The shares have remained stable at just under 1,000 pence, compared with a bid price of 1,075 pence. The consensus among Sky investors is that the deal won’t be blocked, though there is some uncertainty about regulatory issues, Credit Suisse analysts said in a May 10 report. Ofcom is assessing whether Sky would continue to be a “fit and proper” holder of a broadcasting license following the Fox takeover, a standard that involves reviewing potential misconduct by executives. Failing that test would effectively block the deal.
Murdoch’s previous bid for Sky was sunk by a phone-hacking scandal six years ago. Fox is also being investigated by federal prosecutors in the US over whether investors should have been informed about payments the company made to employees to settle sexual harassment allegations. — Bloomberg