Disney's Sky News move eliminates obstacle to Murdoch's £11.7bn takeover


Bloomberg reported that Fox has also attempted to ease those concerns by offering to set up Sky News as a separate company to ensure its journalistic independence.

Disney has separately agreed a $66billion deal to acquire Fox's entertainment assets - including its stake in Sky, the pay-TV group Mr Murdoch launched in 1989 - although the path to completing that transaction has been stymied by the regulatory delay in the Fox-Sky deal.

Many point to Disney's involvement in a deal as a sign that Disney would be willing to support Fox matching Comcast's offer for the part of Sky that 21st Century Fox does not own.

Fox is attempting to buy the 61% of Sky it does not already own but it faces a number of regulatory hurdles after the CMA found the £11.7bn deal was not in the public interest. First, Sky News could be established as a distinct, "ring-fenced" company inside Sky, with its own board and guaranteed funding for 15 years.

Sky shares rose 2.1 percent to 13.25 pounds, the biggest gain on Britain's FTSE-100 index and above both Fox's bid and Comcast's proposed offer, signalling investors expect any suitor will have to pay more.

Much of its decision to propose buying Sky News lies in a desire to eventually own Sky, which has 23 million customers and holds lucrative broadcast rights to the English Premier League and other professional soccer leagues. Fox in December 2016 offered to buy the rest of Sky.

The Competition and Markets Authority has published further remedies proposed by 21st Century Fox for its bid to take over Sky (Frankfurt: 893517 - news).

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Fox is continuing to work with United Kingdom regulators on finalizing the deal for Sky while also fending off a rival bid from Comcast.

United Kingdom regulators have been anxious that a takeover of Sky would give Murdoch - whose News Corp. owns The Times, The Sunday Times and The Sun newspapers - too much sway over British media.

The competition regulator is expected to offer its recommendation on Fox's bid for Sky by May 1.

The agency is mulling whether to recommend the Fox deal for Sky to Culture Secretary Matt Hancock for approval.

Sky has also proposed a softer option which is the "legal separation and comprehensive ringfencing" of Sky News within Sky.

Disney's move on Tuesday would untangle the process by, in effect, leaping over Fox to acquire Sky News directly. Fox added that it would not seek to influence the editorial choices made by Sky News bosses. "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".