21st Century Fox agrees formal £11.7bn bid for Sky

Rupert Murdoch's media empire is seeking to take full control of Sky. Picture: Ian West/PA Wire
Rupert Murdoch's media empire is seeking to take full control of Sky. Picture: Ian West/PA Wire
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Rupert Murdoch’s 21st Century Fox has tabled an agreed £11.7 billion takeover bid for broadcaster Sky.

Fox’s offer of £10.75 per share for the 61 per cent of Sky it does not already own represents a 40 per cent premium and values Sky at £18.5bn.

The secretary of state must refer the bid to Ofcom

Tom Watson

The deal, which shareholders will still have to vote on, comes five years after the media tycoon’s last tilt at taking full control of the business through News Corporation.

That bid was derailed after the company – which owns The Sun and The Times – was forced to abandon the bid when it became embroiled in the phone-hacking scandal involving News International.

READ MORE: Martin Flanagan: Can Rupert Murdoch gain Sky on the cheap?

21st Century Fox said: “The strategic rationale for this combination is clear. It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.

“It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.”

Attention will now turn to culture secretary Karen Bradley, who has until Christmas to decide whether to refer the deal to Ofcom.

A number of Sky shareholders, including Standard Life Investments and Jupiter Asset Management, have questioned the offer price since news of the bid broke last week.

But Martin Gilbert, deputy chairman of Sky and chief executive of Aberdeen Asset Management, has moved to assuage their concerns.

“We, supported by our advisers, believe 21st Century Fox’s offer… will accelerate and de-risk the delivery of future value for all Sky shareholders,” he said.

“As a result, the independent committee unanimously agreed that we have a proposal that we can put to Sky shareholders and recommend.”

But 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. The secretary of state must refer the bid to Ofcom, to assess whether it would result in too much media power being concentrated in too few hands, and whether Rupert and James Murdoch are ‘fit and proper persons’ to run a broadcaster.

“Fox is attempting to finalise this deal as the Christmas break approaches – but there is still time for the government to intervene. They must express their view to parliament before Christmas.”

Watson added: “When she stood on the steps of Downing Street this summer, the Prime Minister said to the people of this country that ‘when we take the big calls, we’ll think not of the powerful, but you’. This is a big call. The government needs to decide whose side it’s on.”

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