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Bloomberg
The UK government intervened in 21st Century Fox Inc.’s 11.7 billion-pound ($14.4 billion) bid to take over Sky Plc, asking regulators to report back within 40 working days on how the deal would affect public-interest issues.
“Today, I have issued a European Intervention Notice on the grounds of media plurality and commitment to broadcasting standards,†UK Culture Minister Karen Bradley said in the House of Commons in London on Thursday.
The regulatory process is the most important hurdle for Rupert Murdoch’s entertainment company to clear as it seeks to build a trans-Atlantic media and entertainment giant. Investors had been expecting the referral as Bradley had already hinted at intervening, and a past attempt by Murdoch to acquire Sky was sent to watchdogs in 2010.
Telecommunications regulator Ofcom will consider the plurality and broadcast-standards issues raised by Bradley. The referral also includes a procedural review by the Competition & Markets Authority. The final decision lies with Bradley, who will look at the regulators’ findings and decide whether to approve the deal, consider undertakings from Fox to address any concerns raised or send it back to the CMA for further investigation.
“We think the deal is likely to proceed,†said Roddy Davidson, an analyst at Shore Capital in London. “We do not believe that it is significantly contentious on concentration of ownership grounds to block and that there is now sufficient separation of Murdoch’s media assets.†Ofcom has said that it will concurrently conduct a so-called fit-and-proper assessment of Sky as a broadcast license holder in light of the pending change of control.