Disney offers to buy Sky News

By Joe Mayes

Walt Disney offered to buy Sky News to help Rupert Murdoch’s 21st Century Fox win over UK regulators reviewing Fox’s £11.7bn (€13.3bn) acquisition of broadcaster Sky.

Disney is interested in acquiring Sky News regardless of whether its larger $52.4bn (€42.5bn) takeover of most of Fox goes through, guaranteeing the editorial independence of the operation, Fox said in a submission to the UK’s Competition and Markets Authority.

Alternatively, New York-based Fox could set up Sky News as a separate company with independent governance to ensure its journalistic integrity, the filing shows.

Fox is bolstering efforts to secure the Sky takeover after Comcast in February made a competing offer for Sky.

Acquiring the 61% of Sky that Fox doesn’t own is part of Mr Murdoch’s broader plan to sell Fox’s media businesses to Disney.

He’s already been foiled once in his effort to buy the stake: He dropped a £7.8bn Sky bid in 2011 after a phone-hacking scandal at Mr Murdoch’s newspapers sparked a political backlash.

This time around, UK regulators have worried a takeover of Sky would give Mr Murdoch — whose News Corp owns The Times, The Sunday Times, and The Sun newspapers — too much sway over British media.

Fox had previously proposed a separate editorial board to insulate Sky News and in March sweetened the offer, proposing a 10-year funding guarantee for the UK’s oldest 24-hour news service.

Yesterday, Fox’s offer to legally separate Sky News came with an enhanced guarantee of 15 years.

“We have proposed a set of solutions that address and resolve any and all questions or concerns that may have been raised by the transaction,” Gerson Zweifach, Fox’s general counsel, said. “We look forward to concluding this acquisition — finally — in a timely and expeditious manner,” he said.

Fox’s offer with Disney is likely to be enough to address the CMA’s concerns and paves the way for a higher bid from Fox for Sky, Ian Whittaker, a media analyst at Liberum in London said.

Comcast’s offer for Sky of £12.50 a share exceeds the £10.75 bid by Fox. Sky shares rose almost 2% in London to £13.22. The competition watchdog is expected to give its verdict on Fox’s Sky bid by May 1, leaving the final decision on whether to approve the deal to UK Culture Secretary Matt Hancock by mid-June.

Disney’s offer to buy the money-losing channel irrespective of its wider bid for Fox is a gamble, given that Disney’s acquisition of Fox is yet to clear regulators and the US entertainment company has little experience of running news businesses in the UK.

- Bloomberg


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