Rupert Murdoch's £11.7billion Fox-Sky takeover CAN go ahead as long as Sky News is sold

  • Culture Secretary says 21st Century Fox's 2016 bid for Sky should move forward
  • But Comcast's £22bn attempt to gazump Murdoch will also given the green light
  • Matt Hancock says Fox now has 15 days to show how it would sell-off Sky News 
  • Comcast will try to grab Sky News and Sky and has offered mega-deal for Fox
  • Boss Brian Roberts has battled Murdoch for years and is gazumping his 'exit deal'

By Martin Robinson, Uk Chief Reporter For Mailonline

Published: 09:17 EDT, 5 June 2018 | Updated: 10:06 EDT, 5 June 2018

Culture Secretary Matt Hancock delivered his verdict on 21st Century Fox's takeover of Sky today - but it will spark a bidding war between Murdoch and rival Brian Roberts of Comcast
Culture Secretary Matt Hancock delivered his verdict on 21st Century Fox's takeover of Sky today - but it will spark a bidding war between Murdoch and rival Brian Roberts of Comcast

Culture Secretary Matt Hancock delivered his verdict on 21st Century Fox's takeover of Sky today - but it will spark a bidding war between Murdoch and rival Brian Roberts of Comcast

Rupert Murdoch's £11.7billion takeover of Sky can go ahead - but only if Sky News is sold off to Disney or another 'suitable' media giant, it was revealed today.

Culture Secretary Matt Hancock delivered his long-awaited verdict on 21st Century Fox's bid for the British broadcasting giant two years after it was submitted.

But Mr Hancock also said he would not block Comcast's rival £22billion offer for Sky sparking a multi-billion pound bidding war between Murdoch and his oldest rival Brian Roberts.

Mr Murdoch's Fox has been attempting to buy the 61 per cent of Sky that it does not already own for two years but the bid has been complicated by competition concerns. 

The media mogul also tried to buy it in 2010 but was forced to dump it in 2011 after the News International phone hacking scandal and closure of the News of the World.

Today's Government decision marks another twist in a complicated and extraordinary transatlantic battle between Fox, Comcast and Disney.

If Mr Murdoch does achieve his dream of owning Sky completely it is likely that the broadcaster would only be in his possession for a few months. 

The Australian-born billionaire has already agreed to sell the majority of Fox's TV and film assets to Disney for $52.4billion (£39billion) and any shares he has in Sky will be included in the deal. 

In response Comcast has tried to scupper Mr Murdoch's deals by launching audacious bids for Sky, Sky News and Fox worth at least £67billion.

Rupert Murdoch's bitterest billionaire rival has launched an audacious bid to gazump the Australian mogul's 'exit' deal to sell his US TV assets to Disney for $52.4billion (£39billion) and hand the reigns to his sons.
Rupert Murdoch's bitterest billionaire rival has launched an audacious bid to gazump the Australian mogul's 'exit' deal to sell his US TV assets to Disney for $52.4billion (£39billion) and hand the reigns to his sons.
The American owner of Comcast, Brian Roberts, has sparked open warfare by plotting an all-cash deal to challenge the sale of Murdoch's 21st Century Fox film and TV studios.
The American owner of Comcast, Brian Roberts, has sparked open warfare by plotting an all-cash deal to challenge the sale of Murdoch's 21st Century Fox film and TV studios.

Rupert Murdoch's bitterest billionaire rival Bob Roberts (right) has launched an audacious bid to gazump the Australian mogul's 'exit' deal to sell his US TV assets to Disney and his takeover of Sky

The $52.4billion (£39billion) deal for 21st Century Fox would see him hand the reigns to his sons Lachlan and James (left and right at their father's fourt wedding)
The $52.4billion (£39billion) deal for 21st Century Fox would see him hand the reigns to his sons Lachlan and James (left and right at their father's fourt wedding)

The $52.4billion (£39billion) deal for 21st Century Fox would see him hand the reigns to his sons Lachlan and James (left and right at their father's fourt wedding)

Mr Hancock said he will now consult over the next 15 days to finalise details of Murdoch's plans to divest Sky News before making a final decision.

But he said if terms of a sale of Sky News cannot be agreed, the 'only effective remedy now would be to block the merger altogether'. He said this was 'not my preferred approach'.

Mr Hancock said: 'I agree with the CMA (Competition and Markets Authority) that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least 10 years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified.'

But he said he wants to ensure that the sale of Sky News would mean it remains financially viable over the long-term; is able to operate as a major UK-based news provider; and is able to take its editorial decisions independently, free from any potential outside influence.

Mr Hancock told the Commons: 'I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals.'

He added: 'I want to see a broadcasting industry in Britain that is strong and effective and competitive.'

Shadow culture secretary Tom Watson told MPs that the approval of both bids 'means that this is not the end of the story' - predicting there would be a bidding war between the media giants.

He said: 'But the Murdochs will be relieved that the old order is at least starting to reassert itself, even before today the new Secretary of State was doing what they asked of him - dumping the promises made to the victims of phone hacking by announcing that Leveson Two would not go forward.'  

The Competition and Markets Authority provisionally blocked the Fox/Sky deal in January due to fears it would hand the media mogul too much control over UK media.

Fox has since been attempting to address the concerns through tabling a series of remedies, including selling Sky News to Disney once the deal is complete.

Disney has separately struck a deal to buy Fox's entertainment assets, including its stake in Sky.

To further complicate matters, Fox's deal was thrown into doubt in February when US media giant Comcast unveiled a £22billion offer for Sky. 

Comcast's attack on Murdoch also includes an audacious bid to gazump the Australian mogul's 'exit deal' to sell his US TV assets to Disney for $52.4billion (£39billion) and hand the reigns to his sons.

The American owner of Comcast, Brian Roberts, sparked open warfare by plotting an all-cash deal to challenge the sale of Murdoch's 21st Century Fox film and TV studios.

Last year Mr Murdoch agreed to sell his US entertainment empire - minus Fox News - to Disney who want to use powerhouse shows like The Simpsons and its Marvel movie franchises for a streaming service to rival Netflix and Amazon Prime. 

But Comcast, an American cable behemoth built on the success of NBC and Universal Studios, has promised a rival bid 'at least as favourable to Fox shareholders' - and crucially it will be in cash not the share-only deal promised by Disney.

Rupert's legacy to his sons could see James (left) move to Disney and Lachlan to run a smaller Fox and News Corp, but this plan is under threat
Rupert's legacy to his sons could see James (left) move to Disney and Lachlan to run a smaller Fox and News Corp, but this plan is under threat

Rupert's legacy to his sons could see James (left) move to Disney and Lachlan to run a smaller Fox and News Corp, but this plan is under threat

Murdoch's sale of his assets marks his exit from much of the entertainment industry by Comcast's recent offers for his businesses 
Murdoch's sale of his assets marks his exit from much of the entertainment industry by Comcast's recent offers for his businesses 

Murdoch's sale of his assets marks his exit from much of the entertainment industry by Comcast's recent offers for his businesses 

If Brian Roberts does gazump Disney it would scupper Rupert Murdoch's plans to exit the entertainment industry and Comcast would also get the Australian billionaire's prized stake in Sky.

Murdoch's decision to sell most of Fox's assets to Disney was part of the 87-year-old's plans to hand power to his sons Lachlan and James and potentially spend more time with his fourth wife Jerry Hall, 61.

Lachlan would be expected to take over a new smaller Fox business based on its Fox News output and its US sports channels. He would also take over his father's newspapers including The Sun, The Times and the Wall Street Journal.

James Murdoch was seen as likely to join the Disney board and was touted as a potential replacement for chairman Bob Iger, who has already delayed his retirement twice.

The battle for 21st Century Fox is one of a number of flashpoints between Roberts and Murdoch who have clashed repeatedly over several decades often in three-way battles also involving Disney.

Mr Murdoch wanted to muscle in on the US broadband market by taking over of the satellite provider DirecTV in 2001. 

Mr Roberts then responded by a huge expansion of Comcast and the takeover of AT&T's broadband operation. Comcast then tried and failed to take over Disney in 2004. Most recently the pair fought over Sky. 

Murdoch's firm has been trying to get its £11.7bn bid for the British broadcaster through since December 2016 but the Government called it in amid fears over media plurality. 

Disney's deal for 21st Century Fox appeared likely to remove those obstacles because they would take Murdoch's Sky shares and they have no major news stations or newspapers.

But last month Comcast swooped in with an offer of £22bn. That complicated Fox's deal with Disney, which included Sky.

Comcast has amassed a £45bn war chest for a takeover battle that will set the stage for a major showdown with Disney, which agreed to buy most of Fox in December.

That deal includes Fox's film and TV studios, sports networks, National Geographic, Star India and stakes in streaming service Hulu and UK broadcaster Sky. 

It received a further boost because the Government has already said it does not intend to refer Comcast's £22 billion bid for Sky to competition authorities, raising the possibility of 21st Century Fox's rival offer being sidelined. 

Rumours had been swirling for months that Comcast's offer for Sky was a prelude to a fresh bid for Fox but until now bosses had denied it.

But last month there was the first formal confirmation by the company it was ready to pounce.

However, sources say Brian Roberts, Comcast's chief executive, will only go ahead if a federal judge approves AT&T's planned £64bn takeover of Time Warner next week.

Comcast, though not well-known in the UK, is the owner of NBC and Universal Pictures. 

It is a formidable rival for Disney, although chairman Roberts has struggled to convince investors to support his takeover plans.

The rise of the Murdoch empire

Mr Murdoch in London after he purchased The Times in 1981
Mr Murdoch in London after he purchased The Times in 1981

Mr Murdoch in London after he purchased The Times in 1981

Here is a timeline showing the mogul's major acquisitions to date.

1968: Mr Murdoch buys Britain's News Of The World newspaper, building on his family's media empire in Australia.

1969: The media mogul takes control of British tabloid the Sun.

1976: He purchases US tabloid the New York Post. It marks his second foray into the US market, having bought the San Antonio Express-News three years earlier.

1981: Mr Murdoch snaps up the owner of the Times and Sunday Times.

1985: He takes over the film unit of 20th Century Fox and a handful of local TV stations that will later become the Fox network.

1987: He buys US publisher Harper & Row, which is merged with his newly-purchased Williams Collins a few years later, becoming Harper Collins.

1989: Mr Murdoch launches Sky Television. One year later it is merged with TV company British Satellite Broadcasting (BSB) to become BSkyB.

1996: He launches the American Fox News Channel, which becomes a major US cable network.

2005: The media mogul makes his first major foray into web-based media, buying social networking site Myspace, which struggles after Facebook gains dominance. It is sold by 2011. He later calls the purchase a 'huge mistake'.

2007: Mr Murdoch acquires financial news organisation the Wall Street Journal.

2011: His media empire is hit with a major scandal after it was revealed that journalists at the News Of The World ordered the phone of murdered schoolgirl Milly Dowler to be hacked. It later emerged that thousands of others were targeted by phone-hacking. The news led to the closure of the newspaper.

2011: News Corporation makes an offer to acquire BSkyB, but is forced to abandon its plans after becoming embroiled in the phone-hacking scandal.

January 2016: Son James Murdoch becomes chairman of Sky, having last held the role between 2003 and 2007. He had resigned following the phone-hacking scandal involving the Murdoch-owned News Of The World. The return of James Murdoch raises questions as to whether 21st Century Fox would mount a fresh takeover bid for Sky.

December 2016: 21st Century Fox tables a formal £11.7 billion takeover bid for broadcaster Sky, offering to buy the 61% of the business it does not already own.

December 2017: Walt Disney launches a separate 52.4 billion (£39 billion) takeover of 21st Century Fox's entertainment assets, which would include its stake in Sky.

January 2018: 21st Century Fox's bid for Sky is provisionally blocked by the Competition and Markets Authority watchdog due to fears that it would hand the Murdochs too much control over UK media. 

February 2018: Comcast makes a £22.1billion offer for Sky to rival the Murdoch bid, throwing his acquisition into doubt.

April 25: Rupert Murdoch’s efforts to buy Sky have been derailed after US cable giant Comcast swooped in with a £22bn counter-bid

June 5: Matt Hancock agrees that proposed takeovers of Sky by Fox and Comcast should move forward 

 

 

 

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