Jun 29, 2017

Fox’s deal to buy Sky stake faces further regulatory hurdles

Rupert Murdoch's bid to seize full control of the European pay TV broadcaster Sky is facing further regulatory hurdles after the UK culture secretary said she was "Minded to" refer the £11.7bn takeover to a competition watchdog. The move came despite Fox offering undertakings to protect the editorial independence of Sky News by establishing an independent editorial board. A separate fit-and-proper test by Ofcom also found that while the "Allegations of sexual and racial harassment at Fox News" were "Extremely serious and disturbing", they did not provide sufficient evidence to conclude that a Fox-owned Sky would not be fit and proper to hold a UK broadcasting licence. If Ms Bradley decides to press ahead, the phase two inquiry could take a further six months, adding another lengthy delay to a transaction that was first announced by Fox and approved by an independent committee of Sky directors last December. The hold-up would almost certainly derail Fox's plans to complete the takeover by the end of 2017 and trigger the payment of a 10p-a-share special dividend, which would cost the US media group just under £172m. If Fox walks away from the deal, it has agreed to pay Sky a £200m break fee.

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