Disney proposes Sky News purchase

Sky shares were trading around two per cent higher on Tuesday after 21st Century Fox suggested that Disney could buy Sky News in order to improve its chances of completing an £11.7bn takeover of Sky.

The UK's competition watchdog found the multi-billion pound deal for the Murdoch-owned 21st Century Fox was "not in the public interest".

"21st Century Fox's proposed remedies on Sky News should be enough to overcome the CMA concerns on news plurality over Fox's bid for Sky", said one analyst in a first reaction.

US cable giant Comcast gate crashed the deal in February when it said it would offer 12.50 pounds a share to buy Sky, compared to Fox's 10.75 pounds, although it has not yet made a formal bid.

Yet just weeks later, United States cable giant Comcast entered the fray to crash the deal, lodging a cash proposal of £12.50 per Sky share which it said represents a 16% increase in value over the existing 21st Century Fox offer and implying an equity value of $31 billion (£22 billion) for Sky.

In a move separate from the Disney offer, Fox also said it would also establish Sky News as a separate company to ease its takeover of Sky.

This ringfencing option would see Sky News operate independently with guaranteed funding from 21 Century Fox for a period of 15 years.

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A Sky statement added: "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.

Disney has been forced to intervene after its rival Comcast sought to throw a spanner in the works by mounting its own £22bn counter bid for Sky. The Murdoch family already own News UK, the owner of the Times and the Sun.

"As the regulatory process remains ongoing, shareholders are advised to take no action at this stage", the company 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", it concluded. Comcast recently also offered to acquire Sky for $31 billion.

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

"More importantly, we think the news and today's comments from Sky point to a revised bid from Fox/Disney to trump Comcast's 1250p bid", they said.

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.

  • Rita Burton