Some interesting twists in the Sky-Fox takeover.
Sky-Fox takeover update: Disney offers to buy Sky News to address regulator fears
Twenty-First Century Fox proposes two options to separate Sky News
US media giant Twenty-First Century Fox (TCF) has proposed two options to address concerns of the Competition and Markets Authority over its offer for the Sky corporation that might give it too much media power in the UK; TCF says that Sky News could be legally separated and ring-fenced so that it would operate completely independently. Another alternative is that Disney, which has offered to buy TCF’s entertainment assets, would also buy Sky News in a separate deal. It would probably not run into any major regulatory issues as it does not have significant media assets already in the UK.
Shares in Sky rise in reaction to latest takeover drama
TCF agreed to pay £10.75 per share for Sky in December but the deal has run into a number of issues since then and been complicated by a £12.50 offer from rival Comcast. Today, Rupert Murdoch’s mass media business highlighted how it had ‘worked diligently with the CMA throughout its extensive review’ and it went on to say that it believes the ‘enhanced firewall remedies proposed to safeguard Sky News comprehensively and constructively addressed the CMA's provisional concerns’.
The Share Centre recommends Sky as a ‘hold’ for medium risk investors
The latest proposals attempt to address media plurality concerns in the UK and the shares responded positively today, but there is clearly still a long way to go in such a complicated situation. With the price currently trading above both offers, lower risk investors may want to lock in recent gains, others should hold.
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