21st Century Fox’s $14.4 billion bid to buy the remainder of U.K. pay-TV operator Sky will be subject to an investigation by U.K. regulators.
Speaking before Parliament, U.K. Secretary of State for Culture Media and Sport Karen Bradley confirmed that she had issued a European intervention notice on the grounds of media plurality and broadcasting standards. Bradley added that since her minded to notification, she had received more than 700 third-party representations, the majority of which called for intervention and many of which called for a new public interest consideration to require a fit and proper assessment of the companies to take place as part of the merger process.
“The first public interest ground on which I am minded to intervene is media plurality. That is, specifically, the need for there to be a sufficient plurality of persons with control of the media enterprises serving audiences in the U.K.,” said Bradley in a statement. “The second public interest ground on which I am minded to intervene is commitment to broadcasting standards. This ground relates to the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to attaining broadcasting standards objectives,” said Bradley in a previous statement.
Based on those public interest considerations, U.K. regulators will seek “comprehensive advice” from independent regulator and competition authority Ofcom (Office of Communications).
Bradley noted that Fox and Sky were cooperating with the investigation, and a statement from Fox signaled the company’s confidence that its potential deal would pass through the scrutiny.
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“21st Century Fox looks forward to working with UK authorities in their reviews of our proposed transaction to combine with Sky,” said a 21st Century Fox spokesperson in a statement. “We are confident that a thorough review of our track record over 30 years will underscore our commitment to upholding high broadcast standards, and will demonstrate that the transaction will not result in there being insufficient plurality in the UK. The media market has changed dramatically in recent years, as has our business. We believe our proposed £11.7 billion investment will benefit the UK’s creative industries. We look forward to continuing to work with all stakeholders and are confident that the transaction will be approved.”
In December, 21st Century Fox announced its intent to buy the roughly 60% of Sky it doesn’t already own in a deal that would value the operator at around $23 billion. Fox previously made a bid to fully acquire Sky, but that effort was dashed in the light of revelations that two of Fox owner Rupert Murdoch’s newspapers were hacking into the mobile phones of celebrities and politicians.
At the time of the December announcement, Sky said the companies had “reached agreement on an offer price of £10.75 [$13.52] per share in cash” but warned that “certain material offer terms remain under discussion and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.”