U.K. Decision Paves Way To Fox-Comcast Bidding War For Sky

(RTTNews) - The UK government will let Twenty-First Century Fox Inc. (FOXA, FOX) take over Sky plc (BSY.L, SKY.L) if it sells Sky News.

U.K. culture secretary Matt Hancock has referred Fox's offer for a further consultation, but has also approved Comcast's rival bid to buy Sky.

The decision paves the way for a bidding war between Comcast and Fox to complete a takeover of Sky.

Fox has been chasing approval from UK regulators since 2016 to buy the 61% of Sky it does not already own.

The takeover was held up by politicians and regulators who feared it could give Rupert Murdoch too much influence over the media in the UK.

The Murdoch-controlled Fox has been attempting to address those concerns through a series of concessions, including selling Sky News to Disney once the deal is complete.

Hancock said he needed to be confident that the final undertakings ensured the continuation of Sky News's long-term financial viability, and that it could continue to operate as a major UK-based news provider making independent editorial decisions.

"As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long-term," he said.

"I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals.

"However, if we can't agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach."

Separately, Sky welcomes today's announcements by the U.K. Secretary of State for Digital, Culture, Media and Sport regarding the proposed offers for Sky by Twenty-First Century Fox and Comcast Corp.

In respect of 21CF's proposed acquisition of Sky, Sky noted that the Secretary of State considers that the undertakings provided by 21CF have provided a good starting point to overcome the adverse public interest effects of the proposed merger that he has identified, and that DCMS Officials have now been instructed to seek to agree final undertakings with 21CF. The Secretary of State has stated that, dependent on the outcome of these discussions, he would hope to be in a position to consult on any agreed final undertakings within the next two weeks.

Sky also noted the Secretary of State's final decision not to intervene on public interest grounds in relation to the Comcast offer for Sky.

Separately, 21st Century Fox said it welcomes announcement by the U.K. culture secretary that he has cleared 21CF's proposed acquisition of the remaining shares in Sky on broadcasting standards, as recommended by the Competition and Markets Authority or "CMA"

Regarding the effects on media plurality we note that the CMA recommended to the Secretary of State that divestiture is "the most effective and proportionate remedy". 21CF said it has already submitted proposed undertakings to achieve the divestiture of Sky News to Disney.

21CF noted that the Secretary of State agreed with this solution and has instructed officials from the Department for Culture, Media and Sport or "DCMS" to agree final undertakings that he would be prepared to accept and consult on within the two-week timeframe.

21CF said it now looks forward to engaging with DCMS and it is confident that it will reach a final decision clearing transaction.