Rupert Murdoch won’t have to wait too much longer to see if he can finally gain full control of UK broadcasting giant Sky PLC (LON:SKY).
Culture secretary Karen Bradley will announce later this morning whether or not she is ‘minded to’ approve 21st Century Fox’s £11.7bn buy-out of Sky or refer it to competition regulators for a more in-depth investigation.
Today's statement from Karen Bradley on the proposed merger between 21st Century Fox and Sky is expected at 11.30am https://t.co/OyQt8uzBwr
— House of Commons (@HouseofCommons) June 29, 2017
Fox already owns 39% of Sky and it’s bidding for the remaining 61%, while Murdoch’s News Corp is also the owner of The Sun and Times newspapers.
Bradley will be armed with information from Ofcom, which handed her a report last week on whether or not Fox could pass a ‘fit and proper’ owner test, and whether any tie-up would harm media plurality.
The conclusions from that report haven’t been made public as of yet.
Last Tuesday, the MP said: “I will consider these reports in detail before coming to an initial view on whether or not I am minded to refer the merger.
“I will aim to make my initial 'minded to' decision, publish the CMA and Ofcom public interest reports…and return to Parliament to make an oral statement by Thursday June 29.
“There will then be an opportunity for representations to be made before I take a final decision.”
Yes, no, maybe…
There are a few options open to the culture secretary and her team.
She could dismiss the deal out of hand, although this is seen as the least likely option by many market analysts.
Alternatively she could wave the deal through as is, request some ‘remedies’ for any concerns she might have, or pass it on to the Competition and Markets Authority for a more in-depth investigation.
The odds certainly seem to be in Fox’s favour, with the acquisition – first announced back in December – having already received the necessary clearances from EU competition authorities.
The share price also seems to be pricing in a positive outcome for the two broadcasters, with Sky shares jumping almost 1% today to 965p.
Election has changed landscape, though
The general consensus before this month’s election was that the deal would likely get the go-ahead, although this doesn’t look so certain now after the Tories lost their majority.
As former Lib Dem business secretary Vince Cable explained to City AM: “There was always a suspicion that if the Conservatives had a big majority they would pull their punches.
“I’ve now got complete confidence in the process, that they will produce a conclusion which is evidence-based and not driven by political sensitivities.”
That said, UBS analyst Polo Tang still expects the takeover to receive the green light eventually, although he does think the election result might delay proceedings.
“Had the Conservatives won a large majority, we think it would have been more straightforward to approve the deal relatively quickly,” wrote Tang in a note to clients.
“With the Conservatives remaining the largest party, we still see scope for the deal to be approved but the risks around an extended review have increased.”