Fox could separate Sky News to satisfy United Kingdom regulator on takeover

CREDIT Courtesy of Sky

The proposals are aimed at easing some of the regulatory concerns over the extent of Murdoch's influence on British media if his 21st Century Fox is cleared to buy the 61 percent of Sky it doesn't already own for 11.7 billion pounds ($16.4 billion).

Fox said in a regulatory filing it has worked "diligently" with Britain's Competition and Markets Authority to come up with proposals that would "safeguard the editorial independence of Sky News" and address the agency's concerns.

The executive chairmen of Sky, Rupert Murdoch and his son Lachlan would not try to influence editorial decisions made by the head of Sky News, according to a statement by 21st Century Fox.

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.

New York-listed entertainment titan Fox has already bid £11.4-billion for the 61% of Sky it does not already own but in Britain concerns linger over the strengthening influence of Australian-born USA tycoon Murdoch.

David Madden, market analyst at CMC, described Fox's move to have Sky News sold to Disney as a "sweetener" to encourage the CMA to give the green light to the larger Sky takeover plan.

In a statement today, Fox has also said that Disney had "expressed an interest in acquiring Sky News" with a view to adding it to its existing portfolio of television channels. Under this scenario, funding for Sky News would be guaranteed for up to 15 years - five years longer than Fox had earlier pledged.

In the absence of an outright sale of Sky News to Disney, Fox offers a full legal separation of Sky News from the rest of Sky.

He went on to say that Sky's comment telling shareholders to "take no action at this stage" was: "somewhat of a coded signal to Sky shareholders not to accept the Comcast bid as there may be a counter-offer coming through from Fox (and, by implication, Disney)". The Murdoch family's news outlets are now consumed by almost a third of the UK's population across TV, radio, online and newspapers.

"The divestment of Sky News to Disney is separate from, and not conditional on, Disney's acquisition of Fox".

Twenty-First Century Fox said, "We are aware that a group of politicians that is opposed to the transaction is seeking to influence the CMA and is making a number of unsupported and fanciful assertions". The principle reason behind this was broadcasting standards and plurality concerns. Sky News would be transferred to this new company, which would have its own management and independent board. Comcast recently also offered to acquire Sky for $31 billion.



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