Sky "disappointed" at latest delay to Fox's takeover bid

Karen Bradley refers Fox  Sky takeover bid to the Competition and Markets Authority

UK Culture Secretary Karen Bradley has told Parliament she is minded to refer 21st Century Fox's £11.7B takeover bid for Sky to the Competition and Markets Authority for review on the grounds of media plurality and commitment to broadcasting standards.

On Tuesday she unexpectedly went even further and said she meant to refer the takeover for further investigation on the grounds that broadcasting standards at Sky could be undermined if the deal went ahead.

Ofcom had said it dealt with the issue of phone hacking when it conducted a "fit and proper" test in 2012, after Murdoch's previous attempt to take over Sky, and another one earlier this year.

Taking account of all relevant representations and Ofcom's advice, Bradley said she has "written to the parties to inform them I am now minded to refer the merger to the CMA on the grounds of genuine commitment to broadcasting standards".

MPs from across political parties, including former Labour leader Ed Miliband, had called for a CMA probe into the company's broadcasting standards in a letter last month.

Already at the time, Ms Bradley said that she had "concerns that there may be public interest considerations ... that warrant further investigation" before the deal is recommended. Adding Sky News to the mix would give the Murdoch family influence over a third of the news sources used in the United Kingdom, according to a June report by communications watchdog Ofcom.

The culture secretary said she had received 43,000 representations over the summer following her initial statement, few of which added substantial new evidence.

"These are matters the CMA may wish to consider in the event of a referral", Bradley said.

"Following receipt of any representations from the parties I will aim to come to my final decision in relation to both grounds as promptly as I can", she said.

And, in a change of view, she said she was also "minded" to refer it out of concerns about broadcasting standards.

Bradley said it was "important that entities which adopt controversial or partisan approaches to news and current affairs in other jurisdictions should, at the same time, have a genuine commitment to broadcasting standards here". However, I am not confident that weaknesses in Fox's corporate governance arrangements are incapable of affecting compliance in the broadcasting standards context.

Fox said it still expects the deal to close by June 30 2018, barring any "further delays" to the process.

Fox already owns a 39 percent stake in Sky, which operates in the U.K., Ireland, Germany, Austria and Italy.

On 29 August in what was seen my many observers as a tactic to ease the bid, Fox News was pulled from Sky's United Kingdom grid.

Shares of Sky, which are valued at 1075p each under the proposed takeover, fell by 5% when Ms Bradley announced her decision to the Commons.

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