21st Century Fox looking to bid for SKY

The move is as controversial as it is significant. It would mark the second time that Murdoch wanted to take full control of Sky, in which his firm has a 39.1% stockholding. The first bid failed spectacularly in the toxic fallout of the News of the World phone hacking scandal leading to the break-up of Murdoch’s then media empire News Corp. Undeterred, Murdoch is back at the table and Sky’s independent directors have confirmed that the company has received an approach from 21st Century Fox, with whom they have reached agreement on an offer price of £10.75 per share in cash. While there is no definite concrete offer by 21st Century Fox, nor as to the terms of any such offer, Sky’s directors are advising shareholders to accept a deal that would value the pay-TV firm’s assets at over £18 billion. Commenting on the move, 21st Century Fox said: “21st Century Fox has consistently stated that its existing 39.1% stake in Sky is not a natural end position. A proposed transaction between 21st Century Fox and Sky would bring together 21st Century Fox’s global content business with Sky’s world-class direct-to-consumer capabilities, which have made it the number one premium pay-TV provider in all its markets. It would also enhance Sky’s leading position in entertainment and sport, and reinforce the UK’s standing as a top global hub for content generation and technological innovation.” Whether the deal goes ahead is highly debatable. UK politicians have already called on the UK government to outlaw the new deal on the same basis for ruling out the first takeover: namely that it is inherently anti-competitive and would place too much power in the hands of one media organization. 21st century Fox, not burdened with UK newspaper assets as was the case with News Corp, reportedly is confident that it is in a much better corporate position to avoid anti-trust legislation. In accordance with UK financial law, 21st Century Fox is required to clarify its intentions by no later than 5.00pm on 6 January 2017, either by announcing a firm intention to make an offer or that it does not intend to make an offer. Both Sky and 21st Century Fox stressed that there could be no certainty that any offer or transaction would proceed.