Regulators given post-election extension to examine Fox's Sky takeover

Oliver Haill Sharecast | 21 Apr, 2017 15:24 | | |

rupert murdoch

Sky

1,000.00

11:45 23/05/17
-0.70%
-7.00
  • 27.26
  • 0.55%0.15
  • Max: 27.34
  • Min: 27.03
  • Volume: 11,426,138
  • MM 200 : n/a
23:26 22/05/17
  • 2,394.02
  • 0.52%12.29
  • Max: 2,395.46
  • Min: 2,386.92
  • Volume: 1,858,438,528
  • MM 200 : n/a
01:17 23/05/17
  • 7,511.93
  • 0.21%15.59
  • Max: 7,521.94
  • Min: 7,489.43
  • Volume: 0
  • MM 200 : n/a
11:45 23/05/17
  • 5,699.40
  • 0.85%47.84
  • Max: 5,701.05
  • Min: 5,661.59
  • Volume: 0
  • MM 200 : n/a
23:26 22/05/17
  • 1,055.52
  • 0.45%4.73
  • Max: 1,056.01
  • Min: 1,052.45
  • Volume: 815,772,288
  • MM 200 : n/a
01:17 23/05/17
  • 7,864.38
  • -0.11%-8.46
  • Max: 7,908.56
  • Min: 7,864.21
  • Volume: 0
  • MM 200 : n/a
11:45 23/05/17
  • 4,169.44
  • 0.23%9.44
  • Max: 4,174.35
  • Min: 4,156.38
  • Volume: 0
  • MM 200 : n/a
11:45 23/05/17
  • 4,112.16
  • 0.23%9.27
  • Max: 4,116.79
  • Min: 4,099.62
  • Volume: 0
  • MM 200 : n/a
11:45 23/05/17

Regulators examining the proposed takeover of Sky by 21st Century Fox will have until after the general election to investigate whether to approve the deal.

Ofcom and the Competition and Markets Authority were due to report back by 16 May but culture and media secretary Karen Bradley said she had extended the deadline due to this week's announcement of a snap election.

"Given the proximity of this decision to the forthcoming general election and following discussions with the parties, Ofcom, the CMA and the Cabinet Office Propriety and Ethics team", Bradley said had moved the deadline until Tuesday 20 June, when Parliament will have officially reopened.

Sky's directors agreed a deal where Fox will buy the 61% of the UK broadcaster it does not already own in an £11.7bn takeover deal.

Media plurality, broadcasting standards and fit-and-proper tests

The European Commission cleared the deal earlier this month on competition grounds, but the UK regulators will also judge whether the deal is in the public interest of media plurality and commitment to broadcasting standards.

FTSE 100-listed Sky and US-listed Fox are both controlled by Rupert Murdoch, who also owns the Times and the Sun newspapers.

Ofcom chief Sharon White will oversee a probe that will also ponder whether Fox bosses are "fit and proper" owners of the UK satellite broadcaster.

Murdoch's son Lachlan Murdoch is a joint chairman of Fox while his younger son James is chief executive and chairman of Sky.

A previous Ofcom investigation into News International following the phone hacking scandal found that while Murdoch Junior "repeatedly fell short of the conduct expected of him as chief executive and chairman" there was "insufficient evidence to conclude he deliberately engaged in wrongdoing".

Betting on the deal

A note on Wednesday from RBC Capital Markets said analysts expect the deal to complete and recommend clients buy Sky for the risk-arbitration return, with Fox's offer giving a 97p spread - a 9.9% absolute return - that gives an implied annualised return of over 25%.

"We believe both the Secretary of State and shareholders are likely to approve the deal, with completion occurring by the end of August."

RBC's best estimate is that if the deal fails, Sky would move to around 10% above its undisturbed price prior to the announcement, with the FTSE 100 having risen around 7% over the same period, implying a price of 860p.

More news

12:34 UK deficit set to provide 'significant drag' on GDP growth

UK public sector borrowing in April was much higher than expected, according to initial forecast data, though borrowing for the last fiscal year was revised down.

11:24 Entertainment One profits fall as film and TV slates 'evolve'

Entertainment One reported strong profit growth for the year to March and reiterated its confidence in doubling the size of the business in the five years to 2020.

10:05 Europe open: Stocks push higher on strong PMIs, IFO index

European stocks are pushing higher, with investors focused on a slate of positive economic data out of the single currency bloc.

10:01 London open: Stocks nudge higher despite tragic Manchester attack

London stocks nudged higher in early trade even as investors digested news of a suspected terror attack at a concert in Manchester on Monday evening that left 22 people dead and more than 50 injured.

09:56 Restaurant Group hit by UBS downgrade

Restaurant Group was under pressure on Tuesday as UBS downgraded the stock to 'sell' from 'neutral' and cut the price target to 275p from 310p following a strong run in the shares recently and pointing to the turnaround plans for Frankie & Benny's.

09:49 Shaftesbury shares spoils from London's booming West End

As London's West End continued to attract shoppers and tourists in droves, landlord Shaftesbury hiked its half-year dividend 10.5% as its portfolio grew in value and profits surged.

08:45 Tuesday newspaper round-up: Bomb attack, Merkel on euro, energy lobbying

At least 22 people have been killed and 59 injured in what is being investigated as a suspected suicide bombing of a crowded pop concert in Manchester, the most deadly attack in Britain in a decade. - Guardian

08:23 Severn Trent turns up dividend tap after finding new efficiencies

Water supplier Severn Trent declared another chunky dividend and said it planned an enhanced payout for the next three years after spying further efficiencies in the business.

11:30 May condemns Manchester terrorist attack which leaves 22 dead

British PM Theresa May has condemned a suicide bomb explosion which killed 22 people and injured many others during an Ariana Grande concert on Monday night.

22 May US close: Markets move higher as dollar remains weak

Commodity-related issues buoyed the main Wall Street averages on Monday as the US dollar continued to trade on the backfoot.