Fox takeover bid for Sky to be reviewed

By BBC

Culture Secretary Karen Bradley has asked regulators to examine Rupert Murdoch’s 21st Century Fox’s takeover bid for Sky.

In a statement to parliament, she told MPs that media regulator Ofcom and competition regulator, the CMA, would be asked to investigate the deal.

21st Century Fox is offering £11.7bn for the 61% stake in Sky it does not already own.

The company said it was “confident” the takeover would be approved.

Critics of the merger, which gives 21st Century Fox access to Sky’s 22 million customers in Europe, fear it will mean Rupert Murdoch has too much control of the UK media.

‘No vendetta’

Ms Bradley had previously said that she was “minded” to call for an investigation.

Since then, she said she had listened to the cases from interested parties, but that they had not sufficiently dismissed her concerns. The two main questions surround whether the deal leaves sufficient “plurality of persons with control of the media enterprises serving audiences in the UK” and whether they had a “genuine commitment to attaining broadcasting standards objectives”.

“While the representations from 21st Century Fox highlighted areas where it contested the position taken in my minded-to letter, none of the representations have led me to dismiss the concerns I have regarding the two public interest grounds I previously specified,” she said.

“I am of the view that it remains both important, given the issues raised, and wholly appropriate for me to seek comprehensive advice from Ofcom on these public interest considerations and from the Competition and Markets Authority (CMA) on jurisdiction issues.”

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Labour MP David Winnick was among those to object to the deal. He said there was no “vendetta” against Mr Murdoch but that “it would be simply unacceptable that the amount of media ownership he already controls should be increased.”

Part of Ofcom’s investigation will include whether Sky’s potential new owners are “fit and proper”. Rupert Murdoch and Lachlan Murdoch are both joint chairmen of 21st Century Fox and News Corp while James Murdoch is chief executive of Fox.

The CMA will provide advice on whether European regulators need to examine the deal.

The two bodies have until 16 May to prepare their reports.

Rupert Murdoch has tried before to take full control of Sky. In 2011 News Corp, which owns The Times and The Sun, made an offer but it was abandoned in the wake of the phone hacking scandal.

In 2013, Rupert Murdoch split the company into two. 21st Century Fox contained the TV and entertainment operations, while News Corp kept the newspaper and publishing businesses.

‘Dramatically changed’

The latest bid is from 21st Century Fox, which said it was looking forward to working with the UK authorities on its review and that it was “confident” the deal would be approved.

“The media market has changed dramatically in recent years, as has our business. We believe our proposed £11.7bn investment will benefit the UK’s creative industries,” it said.

Most analysts believe the deal will go through – and the lack of movement in the share price suggests that investors agree.

One analyst told the BBC that the go-ahead would probably depend on how much “noise” there was surrounding the “fit and proper” test, adding that the left-wing press could well play a part in scuppering the deal.

The case for Rupert Murdoch’s previous takeover bid for Sky was undermined by the revelation that the voicemail of the 13 year-old murdered Milly Dowler’s had been hacked, by the News of the World, a Murdoch newspaper.

Questions may also be raised about the governance of Fox. Last year it apologised for a sexual harassment case brought by one of its former presenters, Gretchen Carlson.