By Ian King, Sky News Business Presenter
The government has said 21st Century Fox would be allowed to buy Sky plc, the owner of Sky News, but only if it agreed in advance to sell the news provider.
Matt Hancock, the Secretary of State for Digital, Culture, Media & Sport, said any buyer would have to guarantee that Sky News remained financially viable, continued to operate as a major UK-based news provider and was able to make editorial decisions independently and free from any potential outside influence.
He said that, without those undertakings, he would have to block the takeover - but stressed this was not his "preferred option".
Mr Hancock, who was acting on the advice of the Competition & Markets Authority (CMA), also said he would raise no objection to a rival £22.1bn takeover bid for Sky from Comcast, the US cable giant.
Fox has already said it would be prepared to sell Sky News to Disney in advance of its proposed takeover of Sky to overcome any concerns about media plurality in the UK.
The company agreed just before Christmas to sell its entertainment assets to Disney, including its stake in Sky, for $66bn including debt.
Mr Hancock said of that proposal today: "I agree…that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least 10 years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified."
He said his departmental officials would immediately begin discussions with Fox on undertakings he would be prepared to accept "so we can all be confident Sky News can be divested in a way that works for the long term".
0:40 Mr Hancock said that, assuming an agreement could be reached, he expected to publish a public consultation on it within the next two weeks.
He said that consultation would be open for at least 15 days, after which he would then consider all representations, potentially leading to further rounds of consultation on amended remedies before he made a final decision.
Fox said: "[We have] already submitted proposed undertakings to achieve the divestiture of Sky News to Disney.
"We note that the Secretary of State agrees with this solution and has instructed officials from the Department for Culture, Media and Sport to agree final undertakings that he would be prepared to accept and consult on within the two week time-frame.
"We now look forward to engaging with DCMS and we are confident that we will reach a final decision clearing our transaction."
But Tom Watson, the shadow culture secretary, said he was concerned about the possibility of Sky News being sold to Disney but the rest of Sky then being bought by Comcast.
He told MPs: "Sky is a gem of British broadcasting respected worldwide, its future and global reputation for excellence is at stake in this process [and] so it is right that, if there is any doubt about whether the proposed solution is workable then it is the duty of the Secretary of State to ensure that this merger is blocked."
Fox is already Sky's biggest shareholder with a 39.1% stake.
It first tabled a proposal in December 2016 to buy the remainder of the company for £11.7bn, valuing the whole of Sky at £18.5bn.
The offer has been held up by a series of regulatory investigations, first by Ofcom, the telecoms and media regulator, and then by the CMA.
The latter said in February that the takeover "may be expected" to act against the public interest because it concentrated too much influence over the UK media industry in the hands of the Murdoch Family Trust.
The trust - the vehicle through which Rupert Murdoch, the executive chairman of 21st Century Fox, owns a controlling stake in that company - also has a controlling stake in News Corporation, owner of The Sun, the UK's top-selling national newspaper, as well as The Times, The Sunday Times and the Wall Street Journal.
Fox subsequently offered two remedies.
The first pledged to ring-fence Sky News from the rest of Sky by putting the business in a separate company with its own independent board and a separate editorial sub-committee with the power to hire and fire the head of Sky News and set the channel's editorial guidelines.
Under this arrangement, Fox promised to continue funding Sky News for 10 years at the present level and for a further five years at a level "not materially different" from that.
Under the second proposal, Sky News would effectively be sold to Disney, which just before Christmas, tabled a separate $66bn offer for Fox's entertainment assets, including Sky.
:: What the Disney/Fox deal aims to achieve
That deal is currently being assessed by US regulators.
This second proposal saw Disney guarantee to continue funding Sky News for five years at the present level and for a further five years at a level "not materially different" from now.
Comcast has also offered commitments to guarantee the funding and editorial independence of Sky News.
A separate review by the European Commission has already approved Fox's bid for Sky.
Brussels will announce by 14 June whether it plans to launch an investigation into Comcast's bid.
The Fox takeover has also been cleared by individual regulators in all of the other countries - Germany, Austria, Italy and Ireland - in which Sky broadcasts.
Shares of Sky, which were valued at 1075p each under the original Fox bid and at 1250p under the Comcast bid, were up 5.5p at 1355.5p at 1525 BST, settling at 1351p by closing.
Sky's board is not currently recommending either the Fox or the Comcast offer to its shareholders.
The company said in a statement: "The independent directors of Sky are mindful of their fiduciary duties and remain focused on maximising value for Sky shareholders."
More from Business
-
European businesses advised to avoid using British parts ahead of Brexit
-
TSB boss faces more questioning from MPs over bank's IT system fiasco
-
Aston Villa suspends CEO as club races to meet HMRC tax bill
-
Controversial Heathrow expansion gets government go-ahead
-
Calais boss warns 'clock is ticking' over Brexit
-
RBS stake sale realises £2bn loss on bailout value
Separately, Comcast is also seeking to disrupt Disney's acquisition of Fox's entertainment assets.
It said last month that it was preparing a rival all-cash offer that would be on "superior" terms to Disney's all-share offer.
Original ArticlePolitics
0 comments:
Post a Comment