Published: Sun, December 18, 2016
Economy | By Melissa Porter

Sky and 21st Century Fox agree on new takeover deal

Sky and 21st Century Fox agree on new takeover deal

"We have been thoughtful, disciplined and focused as we have contemplated the best use of our capital to drive the growth of the business into the future", said Lachlan Murdoch, 21st Century Fox's executive chairman, during a conference call with investment analysts Thursday. The strategic rationale for this combination is clear.

"We scratch our heads in terms of what a distribution company headquartered in the United Kingdom does for a global content company headquartered in the USA over the long term", Wells Fargo analysts led by Marci Ryvicker wrote in a December 12 research note.

Cord-cutting has taken off since 2014, and now the deal du jour is matching up media giants with companies that go direct to consumers with pay-TV and mobile-phone subscriptions: AT&T is hoping its DirecTV and mobile customers will benefit from such synergy if its $85 billion acquisition of Time Warner goes through, and cable giant Comcast already counts NBCUniversal as part of its properties.

Fox expects the agreement to close before the end of 2017, but as reported by Sky News, the "scheme of arrangement" takeover means that only 75% of Sky's independent shareholders need to approve the deal before minority stakehoders opposed to the offer are compelled to accept it. Under News Corporation, Rupert Murdoch already owned around 39 percent of Sky; a deal to acquire the remaining shares in 2010 fell through as a result of the scandal and following resignation of Rupert Murdoch's son James Murdoch from his posts of chair at BSkyB and News International. The company pledged to keep Sky's headquarters in London and complete a 1 billion-pound investment in the campus.

Tom Watson, deputy leader of the Labour Party and shadow secretary of state for culture, said: "This bid was abandoned in the wake of the phone-hacking scandal, and now it's back".

Rupert Murdoch has dominated Britain's media and political landscape for decades, with former prime ministers Margaret Thatcher, Tony Blair and David Cameron securing the media mogul's blessing and the backing of his papers.

Bradley has the power to ask Ofcom, the media regulator, to further examine the deal. They must express their view to Parliament before Christmas.

The government has 10 working days from the formal announcement of a merger to decide whether to intervene.

Imagine if Polo Tang was Sky's senior independent director.

"Such disclosure would help shareholders assess the fairness of the offer and give greater confidence in the independence of the committee in the bid process". They declined 0.2 percent to 981.50 pence at 2:49 London.

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