Sky’s share price in doldrums on eve of reports into takeover

SKY’S share price remains well below pre-Election levels ahead of reports expected on Tuesday examining the proposed £11.7 billion takeover of the company by Rupert Murdoch’s 21st Century Fox. The Competition and Markets Authority and Ofcom will be reporting on media plurality and on whether Sky would remain a ‘fit and proper’ broadcaster if it were fully owned by Murdoch.

Fox owns 39 per cent of Sky and is bidding to acquire the remaining 61 per cent. Theresa May’s failure to win a majority saw Sky’s share price plunge. Investors believe the merger would be more likely to go through if the Tories hold a majority of seats in Parliament.

There is considerable crossparty political opposition to a deal. The newly re-elected Liberal Democrat Sir Vince Cable, former Labour leader Ed Miliband and senior Tory Ken Clarke are all lobbying regulators to block the deal on the grounds that Fox would not be a ‘fit and proper’ owner of Sky.

The MPs have cited numerous scandals involving senior Fox staff in the US – including former Fox News chairman Roger Ailes and news anchor Bill O’Reilly, who were accused of sexual harassment by numerous women. Both men denied the allegations. Fox and O’Reilly paid out millions of dollars to alleged victims.

Murdoch’s offer valued Sky at 1075p a share but the closing price on Friday was 965p, down from 990p on the day before the Election. Analysts regard the falling share price as a strong indication that the takeover is in doubt.