Economy

21st Century Fox proposes Sky News sale to Disney

21st Century Fox proposes Sky News sale to Disney

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.

The Competition and Markets Authority (CMA) is now scrutinising the deal, which would see Fox, which now controls 39 per cent of Sky, take full control of the company.

The other proposal would involve a legal separation and ringfencing of Sky News, including the creation of an independent board of directors.

Liberum analysts argued that the deal should allow Fox to hurdle the obstacles that the CMA had put in the way of the Sky takeover.

Fox has also offered to establish Sky News as a separate entity, a solution it offered in its previous, thwarted attempt to buy out the 61% of the pan-European satcaster that it does not already own.

21st Century Fox said that Disney has "expressed an interest" in acquiring Sky News, whether or not Disney's proposed acquisition of 21st Century Fox moves forward.

Rupert Murdoch ratcheted up the pressure on Britain to approve his $15 billion-plus bid for pay-TV group Sky by offering to sell or legally separate Sky News, aiming to head off objections the deal could give him too much political influence. "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", it said.

The proposed transaction has however been complicated by a rival £22bn bid for Sky from broadcaster Comcast, owner of NBC and Universal Studios, in February.

"In the wider picture, Disney are more focused on the entertainment side of the business whereas Fox are more news focused", he told City A.M.

"As the regulatory process remains ongoing, shareholders are advised to take no action at this stage", the company said. Disney will have full ownership of Sky, including, as it stands, Sky News, if the takeover deal is approved.

"The fact that Disney has agreed to this today suggests that the next thing to expect is a revised bid from Fox/Disney for Sky, to match or beat Comcast's offer".

Announcing the two remedies, Fox said: "We have worked diligently with the CMA throughout its extensive review".

'These enhanced remedies went above and beyond what Ofcom, the expert, independent regulator on United Kingdom broadcasting, had stated would mitigate concerns around media plurality'.

Comcast's offer of 12.50 pounds per Sky share exceeds a 10.75-pound offer by Fox.