Published: Wed, April 04, 2018
Markets | By Erika Turner

Disney Could Acquire Sky News in Fox-Sky Deal's Latest Twist

Disney Could Acquire Sky News in Fox-Sky Deal's Latest Twist

Walt Disney Co. has offered to buy United Kingdom media outlet Sky News in an effort to assist 21st Century Fox's bid to acquire the European broadcast giant, Bloomberg News reported Tuesday.

Rupert Murdoch-backed Fox's £11.7bn (US$15bn) takeover of Sky faltered again earlier this year after United Kingdom regulator the Competition and Markets Authority (CMA) found the deal was not in the public interest.

That could remove a major objection from the CMA, allowing Fox to acquire the 61% of Sky it doesn't already own.

Disney's December deal to acquire for $52.5 billion many of Fox's assets, including its stake in Sky, is separate from the Sky News offer.

Fox said that Disney had "expressed interest" in buying Sky News, to help clear the way for the Murdoch-owned media giant to complete its proposed £18.5bn takeover of Sky.

One of these will see Disney making an offer to buy Sky News from Fox outright, thus potentially alleviating worries that the respected United Kingdom news channel may adopt a Fox News-style modus operandi post acquisition.

The plan to hive off Sky News would see it legally separated from the rest of Sky, with a fully independent board and guaranteed funding from Fox for 15 years. In fact, we believe that the enhanced firewall remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA's provisional concerns.

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Whatever bit of Sky that Fox owns by the time the takeover goes through will be bought by 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.

First, Fox must have received approval from Disney to offer the concession, they said, and second, Sky said its independent directors remained focused on maximising value for shareholders.

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".

Fox stressed on Tuesday that Disney would in any case purchase Sky News even if it didn't buy Murdoch's group.

Analysts at Liberum said they think Fox's proposed remedies should be enough to overcome the CMA's concerns on news plurality.

But the proposal faces another challenge as USA broadcaster Comcast is mounting its own £22.1 billion takeover approach for Sky.

The CMA will now review the proposals and is due to report back to British culture secretary Matt Hancock by May 1, who will make a final decision on the deal.

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