Mouse in the house

3 April 2018 By Liam Proud Follow @liamwardproud

The U.S. media giant may buy the UK group’s news business to ease regulatory concerns over merger partner Fox’s bid for the whole company. Given Disney probably has little interest in the loss-making channel, the tactic shows a readiness to fight off Comcast’s rival bid for Sky.

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Twenty-First Century Fox said on April 3 it had proposed either a legal separation of Sky News from Sky or a sale of the news channel to Fox’s planned merger partner Walt Disney, in an effort to ease antitrust concerns over its bid for the pay-TV group.

Britain’s Competition and Markets Authority has until May 1 to finish its review of Fox’s 11.7 billion pound offer for the 61 percent of Sky that it doesn’t own. The regulator said on Jan. 23 that the deal could act against the public interest by giving Fox Chairman Rupert Murdoch’s family too much control of the UK news market.

Under Fox’s first proposal to address those concerns, the U.S. group would establish Sky’s loss-making news business as a distinct company within the wider group, with a “fully independent” board and guaranteed funding from Fox for 15 years.

Under the second proposal, Disney would buy the carved-out Sky News business, pledging to maintain its new corporate governance structure for 10 years, and ensure that changes are not made to the company’s editorial guidelines without approval from regulators or the relevant government minister.

Comcast offered 12.50 pounds a share in cash for Sky on Feb. 27, topping an existing offer of 10.75 pounds from Fox, which owns 39 percent of the European satellite broadcaster.

In December, Fox agreed to a $52.4 billion stock offer from Walt Disney for its entertainment assets and international units, including its stake in Sky.

Sky shares were up 1 percent to 13.10 pounds at 0951 BST on April 3.

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