Murdoch’s Foes Plan Proposals to Restrict Fox in Sky Transaction

  • Fox’s Sky bid faces scrutiny from Hacked Off, 38 Degrees
  • Changes to U.K. Digital Economy Bill being sought in weeks

Fox's Murdoch Acquires Sky in $14.6 Billion Deal

Citizens who are campaigning against Rupert Murdoch’s plan to gain full control of Europe’s dominant pay-TV company are seeking to hamper the 11.7 billion-pound ($14.6 billion) deal through the U.K. Parliament.

Hacked Off, a media accountability advocacy group formed during the phone-hacking scandal that thwarted Murdoch’s first takeover attempt for Sky Plc in 2011, is preparing to propose changes to the Digital Economy Bill that could help impede the deal. The bill addresses electronic-communications infrastructure and services. The group plans to have a lord in Parliament’s second chamber present its initiative in the coming weeks.

While the details are still being worked out, amendments could focus on media plurality and corporate governance, said Evan Harris, the group’s joint executive director. Hacked Off and 38 Degrees, another advocacy group, are circulating petitions to tap into public sentiment against the media billionaire and pressure politicians to scrutinize the deal.

Murdoch’s 21st Century Fox Inc. said Thursday it agreed to acquire the 61 percent of London-based Sky that it doesn’t already own. The deal for the U.K. pay-TV company is part of a new wave of convergence between media producers and distributors, starting with AT&T Inc.’s agreement to buy Time Warner Inc., as established players combat the threat of streaming content from Netflix Inc. and Inc.’s Prime service.

Representatives of Fox and Sky declined to comment.

Media Changes

Murdoch is counting on changes to his empire, U.K. politics and the broader media industry to smooth the way. His 2010 bid for Sky was cleared by regulators and later derailed by the phone-hacking scandal at his newspapers.

Still, Sky’s shares are trading below the offer price of 10.75 pounds per share on perceived regulatory and political risks and the chance it takes all of 2017 to complete the deal. Sky shares closed at 991 pence on Friday in London, a 7.8 percent discount to the offer price.

The government has 10 working days from the formal announcement of a merger to decide whether to intervene. Hacked Off and other campaigners are pushing Culture Secretary Karen Bradley to hand the bid to Ofcom on public interest grounds and have the regulator conduct what’s known as a “fit and proper person test” to determine if Fox’s executives should be allowed to control Sky.

Before it's here, it's on the Bloomberg Terminal.