Rupert Murdoch cleared for Sky takeover
Government green light paves the way for bidding war
Rupert Murdoch has been cleared to take over Sky, bringing an end to almost two years of regulatory scrutiny by the government.
The new culture secretary, Jeremy Wright, has given the green light for Murdoch’s 21st Century Fox to buy the remaining 61% of Sky he does not already own, on the proviso he sells Sky News to reduce his control of UK news media.
Wright, who has only been in place for three days, said: “It is right that Ofcom, the Competition Markets Authority and my department have taken such care in ensuring the bid is properly and effectively scrutinised. It is now a matter for the Sky shareholders to decide whether to accept [a Murdoch] bid.”
It marks an important milestone in the long-running saga to gain complete control of Sky, dating back almost a decade.
Murdoch’s first bid was withdrawn back in 2011 in the wake of the phone hacking scandal. It was revived again in 2016 but has since faced 19 months of regulatory scrutiny by the media regulator, Ofcom, and the Competition Markets Authority over questions of media plurality and press standards.
The BBC reports “politicians and regulators were concerned it could give Mr Murdoch too much power over the media in the UK, [while] there were also worries about Sky News' long-term financial viability, and how independent it would be editorially”.
Yet the media mogul faces stiff competition from US giant Comcast, which on Wednesday night lodged a bid that valued Sky at £25.9bn, just hours after Murdoch has himself tabled an improved offer.
The speed of Comcast’s reaction “was a deliberate move designed to show Murdoch that the company is determined to pursue Sky and has the stomach for a bidding war” says The Guardian.
Sky’s share price has risen by 50% since last summer, and rose a further 2% yesterday as investors reacted to the prospect of an all-out bidding war.