21st Century Fox proposes Sky News sale to Disney

Randall Padilla
April 4, 2018

By offering to purchase Sky News as a separate entity, the Walt Disney Company should allay regulatory concerns by taking Sky's news outlet from Murdoch's hands. It has made a proposal to buy all of Sky, including the 39 per cent owned by Fox - that values the pan-European pay TV group at £22billion or £12.50 per share, a 16 per cent premium to the £10.75 a share offer from Fox.

Mr Murdoch's family already have extensive media holdings, including stakes in newspapers such as The Sun and The Times.

As an alternative to the Disney sale, Fox proposed additional measures to preserve the news channel's independence.

Fox agreed in December 2016 to buy the 61 percent of Sky it does not already own, but the deal has been repeatedly delayed by the United Kingdom government and regulators, allowing Comcast to gate crash the deal in February.

Twenty-First Century Fox proposed new ring-fencing remedies which would effect the legal separation between Sky News and the rest of Sky, establishing Sky News as a distinct company within the Sky Group, with its own fully independent board and under the management control of the Head of Sky News. Disney will have full ownership of Sky, including, as it stands, Sky News, if the takeover deal is approved. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming.

That could remove a major objection from the CMA, allowing Fox to acquire the 61% of Sky it doesn't already own. That's a slightly stronger version of an idea which media watchdog Ofcom, the first regulator to review the deal, said would "mitigate" concerns.

A CMA spokeswoman said on Tuesday it had until May 1 to provide its report on the proposed deal to Britain's minister for digital matters, culture, media and sport.

It remains to be seen what decisions will be made in the next few days.

Sky also expressed in a separate statement its confidence that the proposals will tackle the regulator's fears, saying: "Sky believes that both of these remedy proposals comprehensively address any plurality concerns the CMA may have, and would guarantee the long term future of Sky News and its ongoing editorial independence".

One London-based hedge fund said the measures should be sufficient, but that "the price issue is not going away", suggesting Fox would have to raise its bid.

The group, which has a broadband arm serving 29 million United States customers, owns NBC and Universal Pictures and wants to seize more than 50 per cent of Sky. Elliott declined further comment. It also pledged 15 years of guaranteed funding for the news channel.

Even with government approval, the Fox-Sky deal isn't certain.

Other reports by AllAboutTopnews

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