Search Share Prices
Sky higher as Culture Sec gives almost-all-clear for takeover
Sky's potential takeover by Comcast or 21st Century Fox was cleared by the Department for Digital, Culture, Media and Sport on Tuesday.
Culture Secretary Matt Hancock told parliament on Tuesday that Comcast's proposed £22bn all-cash acquisition offer for Sky was clear to go, raising no public interest concerns, as he had suggested last month.
As for Fox's bid, over which the Competition & Markets Authority had objected on media plurality concerns due to the Murdoch family's ownership of Fox together with the Sun, the Times and the Sunday Times under the News Corp umbrella.
Following the CMA's proposal that the divestment of 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 ten years, is, said Hancock, "likely to be the most proportionate and effective remedy for the public interest concerns that have been identified".
The DCMS Secretary said while Fox had written to confirm its willingness to comply with divestment terms suggested by the CMA's, "there are some important issues on the draft undertakings which still need to be addressed", including that these final undertakings ensure that Sky News "remains financially viable over the long-term, is able to operate as a major UK-based news provider and is able to take its editorial decisions independently, free from any potential outside influence".
As a result, DCMS officials are in talks with the companies to reach "an acceptable form" of this potential remedy.
Following the required 15 days of formal consultation on the undertakings, Hancock said he aimed to publish this consultation within a fortnight.
"I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals. However, if we can't agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach."
In its response, the Sky board stressed that its independent directors "are mindful of their fiduciary duties and remain focused on maximising value for Sky shareholders", having already stated a preference for Comcast's £12.5 per share bid, in preference to the £10.75 offer from Fox that they agreed in December 2016 for the 61% of Sky that Fox does not already own.