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| UK government clears Comcast and Fox takeover bids for Sky – live updates | UK government clears Comcast and Fox takeover bids for Sky – live updates |
| (35 minutes later) | |
| Elsewhere the US tech boom continues: | |
| Facebook: All-Time HighApple: All-Time HighAmazon: All-Time HighNetflix: All-Time HighNasdaq 100: All-Time High pic.twitter.com/5IDbGT0hsV | |
| A bidding war for Sky is now on the cards but it is hard to judge how much higher the offers will go, says Neil Wilson, chief market analyst for Markets.com: | A bidding war for Sky is now on the cards but it is hard to judge how much higher the offers will go, says Neil Wilson, chief market analyst for Markets.com: |
| Sky shares traded up about half a per cent [on the day] at £13.55 as the Fox and Comcast bids were effectively waved through by culture secretary Matt Hancock. The commitment by Fox to let go of Sky News always looked like it be sufficient to assuage the media plurality concerns. For Comcast there were never any media plurality worries as it’s got little European presence. | Sky shares traded up about half a per cent [on the day] at £13.55 as the Fox and Comcast bids were effectively waved through by culture secretary Matt Hancock. The commitment by Fox to let go of Sky News always looked like it be sufficient to assuage the media plurality concerns. For Comcast there were never any media plurality worries as it’s got little European presence. |
| A bidding war looms of course. The bid on the table from Comcast is an all-cash offer worth £12.50 per share, so an increased offer is priced in already. But the fact that the shares are not roaring higher suggests investors are displaying some hesitation about whether Murdoch will significantly increase his offer. He may not have to - the option for Fox is to switch from the current Scheme of Arrangement to a Takeover Offer, which would allow it to use its 39% of shares in the vote. | A bidding war looms of course. The bid on the table from Comcast is an all-cash offer worth £12.50 per share, so an increased offer is priced in already. But the fact that the shares are not roaring higher suggests investors are displaying some hesitation about whether Murdoch will significantly increase his offer. He may not have to - the option for Fox is to switch from the current Scheme of Arrangement to a Takeover Offer, which would allow it to use its 39% of shares in the vote. |
| Then it’s up to Comcast and we’ll see just deep the pockets are - how badly does it want to diversify from the US and get exposure to Sky’s attractive recurring revenues in Europe? The fact it thinks the deal would be accretive to free cash per share from year one suggests it can. And all this is muddied by the fact that Comcast has admitted it is in advanced stages of preparing an offer for the businesses that Fox has agreed to sell to Disney. | Then it’s up to Comcast and we’ll see just deep the pockets are - how badly does it want to diversify from the US and get exposure to Sky’s attractive recurring revenues in Europe? The fact it thinks the deal would be accretive to free cash per share from year one suggests it can. And all this is muddied by the fact that Comcast has admitted it is in advanced stages of preparing an offer for the businesses that Fox has agreed to sell to Disney. |
| A bidding war seems on the cards but we just don’t know how far either side will push this. Comcast shares are down a touch and are around 25% lower from their highs this year, indicative of investor fears about it paying over the odds. Disney shares were also a shade lower and are around 10% off their 2018 highs. Either way it’s shaping up to be a battle royale between Comcast and Disney this summer and Sky shareholders will be winners now the deals have been cleared by the government. | A bidding war seems on the cards but we just don’t know how far either side will push this. Comcast shares are down a touch and are around 25% lower from their highs this year, indicative of investor fears about it paying over the odds. Disney shares were also a shade lower and are around 10% off their 2018 highs. Either way it’s shaping up to be a battle royale between Comcast and Disney this summer and Sky shareholders will be winners now the deals have been cleared by the government. |
| Ben Bird, media sector specialist at management consultancy Vendigital, said: | Ben Bird, media sector specialist at management consultancy Vendigital, said: |
| The culture secretary’s decision to allow the 21st Century Fox bid to go ahead, subject to a request that Sky News is divested, is essentially good news for the consumer as the consolidation is all about safeguarding content. | The culture secretary’s decision to allow the 21st Century Fox bid to go ahead, subject to a request that Sky News is divested, is essentially good news for the consumer as the consolidation is all about safeguarding content. |
| It will be especially heartening for others in the media sector that the CMA is not intending to block the bid. This could be a sign that the organisation has recognised that there is a real need for medium and large-scale companies in the sector to leverage their scale. | It will be especially heartening for others in the media sector that the CMA is not intending to block the bid. This could be a sign that the organisation has recognised that there is a real need for medium and large-scale companies in the sector to leverage their scale. |
| Sky is not immune to the disruption facing the industry, with the rise of agile competitors such as Amazon and Netflix. Attracting the attention of consumers has become more difficult and the business needs to reduce costs where it can, whilst continuing to produce quality content. | Sky is not immune to the disruption facing the industry, with the rise of agile competitors such as Amazon and Netflix. Attracting the attention of consumers has become more difficult and the business needs to reduce costs where it can, whilst continuing to produce quality content. |
| Other media companies will be willing the bid to complete successfully – particularly with the outcome of the CMA’s investigation into Trinity Mirror’s proposed takeover of Northern & Shell still pending. | Other media companies will be willing the bid to complete successfully – particularly with the outcome of the CMA’s investigation into Trinity Mirror’s proposed takeover of Northern & Shell still pending. |
| More from the CMA: | More from the CMA: |
| Too much influence? CMA says that Rupert Murdoch and News Corp execs met PM 26 times between Jan 2015 and June 2017. Over same period BBC had 11 meetings. Government ministers “accepted hospitality from Rupert Murdoch and News Corp...more than any other media enterprise.” pic.twitter.com/GiSqmvwuO4 | Too much influence? CMA says that Rupert Murdoch and News Corp execs met PM 26 times between Jan 2015 and June 2017. Over same period BBC had 11 meetings. Government ministers “accepted hospitality from Rupert Murdoch and News Corp...more than any other media enterprise.” pic.twitter.com/GiSqmvwuO4 |
| The full CMA report is available here. | The full CMA report is available here. |
| From the 414 page Competitions and Markets Authority report on the possible Sky bids, here is its view on the timetable for a Sky News sale: | From the 414 page Competitions and Markets Authority report on the possible Sky bids, here is its view on the timetable for a Sky News sale: |
| Sky shares have done little since Hancock unveiled his decision on both the Comcast and 21st Century Fox bids. | Sky shares have done little since Hancock unveiled his decision on both the Comcast and 21st Century Fox bids. |
| They stood at £13.53 when Hancock stood up, and are now almost imperceptibly higher at £13.56. That compares with the £10.75 a share on offer from Fox, and the better offer from Comcast of £12.50 a share. | They stood at £13.53 when Hancock stood up, and are now almost imperceptibly higher at £13.56. That compares with the £10.75 a share on offer from Fox, and the better offer from Comcast of £12.50 a share. |
| Here’s a link to the full statement from Matt Hancock on both bids for Sky: | Here’s a link to the full statement from Matt Hancock on both bids for Sky: |
| Following our finding that the Sky/Fox deal is not in public interest, @DCMS Secretary of State has accepted the CMA’s recommendations and today announced his decision in a statement to Parliament. Read it now: https://t.co/xCfiKvF94v | Following our finding that the Sky/Fox deal is not in public interest, @DCMS Secretary of State has accepted the CMA’s recommendations and today announced his decision in a statement to Parliament. Read it now: https://t.co/xCfiKvF94v |
| Here’s the key section from Matt Hancock’s statement -- outlining why 21 Century Fox must sell off Sky News in return for the government approving its takeover for Sky. | Here’s the key section from Matt Hancock’s statement -- outlining why 21 Century Fox must sell off Sky News in return for the government approving its takeover for Sky. |
| I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified. | I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified. |
| The CMA report sets out some draft terms for such a divestment, and Fox has written to me to offer undertakings on effectively the same terms. | The CMA report sets out some draft terms for such a divestment, and Fox has written to me to offer undertakings on effectively the same terms. |
| The proposals include significant commitments from Fox. But there are some important issues on the draft undertakings which still need to be addressed. | The proposals include significant commitments from Fox. But there are some important issues on the draft undertakings which still need to be addressed. |
| I need to be confident that the final undertakings ensure that Sky News: | I need to be confident that the final undertakings ensure that Sky News: |
| remains financially viable over the long-term; | remains financially viable over the long-term; |
| is able to operate as a major UK-based news provider; | is able to operate as a major UK-based news provider; |
| and is able to take its editorial decisions independently, free from any potential outside influence. | and is able to take its editorial decisions independently, free from any potential outside influence. |
| As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long term. | As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long term. |
| Under the legislation, I am required to consult formally for 15 days on the undertakings. | Under the legislation, I am required to consult formally for 15 days on the undertakings. |
| Subject to the willingness of the parties to agree the details, I aim to publish this consultation within a fortnight. | Subject to the willingness of the parties to agree the details, I aim to publish this consultation within a fortnight. |
| I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals. | I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals. |
| However, if we can’t agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach. | However, if we can’t agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach. |
| Here’s a clip of Chris Bryant suggesting that Kay Burley will drive Matt Hancock out of parliament if Sky News hits the buffers. | Here’s a clip of Chris Bryant suggesting that Kay Burley will drive Matt Hancock out of parliament if Sky News hits the buffers. |
| Chris Bryant suggests Kay Burley will run against Big Matt Hancock if SkyNews fails. pic.twitter.com/Ak7ivz4Ok7 | Chris Bryant suggests Kay Burley will run against Big Matt Hancock if SkyNews fails. pic.twitter.com/Ak7ivz4Ok7 |
| Anything Martin Bell can do, Kay can do too..... | Anything Martin Bell can do, Kay can do too..... |
| Liberal Democrat MP Christine Jardine says her party has concerns about Fox’s proposed takeover of Sky. | Liberal Democrat MP Christine Jardine says her party has concerns about Fox’s proposed takeover of Sky. |
| She welcomes the plan for Sky News to be divested... but wonders if rival bidder Comcast will give similar reassurances about media independence if it wins the battle for Sky. | She welcomes the plan for Sky News to be divested... but wonders if rival bidder Comcast will give similar reassurances about media independence if it wins the battle for Sky. |
| Matt Hancock replies that Comcast has given undertakings and assurances. | Matt Hancock replies that Comcast has given undertakings and assurances. |
| By law, he looked at its bid for Sky because of its material size. He concluded that Comcast’s bid did not raise public interest concerns, so the government will not issue an intervention notice. | By law, he looked at its bid for Sky because of its material size. He concluded that Comcast’s bid did not raise public interest concerns, so the government will not issue an intervention notice. |
| Hancock adds that he hopes the Sky takeover battle will reach a conclusion that “demonstrates with confidence” that Sky News will be independent and viable, so parliament can be content with the state of media plurality in future. | Hancock adds that he hopes the Sky takeover battle will reach a conclusion that “demonstrates with confidence” that Sky News will be independent and viable, so parliament can be content with the state of media plurality in future. |
| Back in parliament, Labour MP Chris Bryant has criticised the proposal for Sky News to be sold off if 21st Century Fox wins the takeover battle for Sky. | Back in parliament, Labour MP Chris Bryant has criticised the proposal for Sky News to be sold off if 21st Century Fox wins the takeover battle for Sky. |
| He warns that Sky News could be starved of money by whoever buys it (either Disney or another owner). So, in a few years they’ll come back to the government and ask to be subsumed back into Fox. | He warns that Sky News could be starved of money by whoever buys it (either Disney or another owner). So, in a few years they’ll come back to the government and ask to be subsumed back into Fox. |
| To laughter, Bryant suggests that Matt Hancock could even find himself facing a TV news veteran at the polling booth. | To laughter, Bryant suggests that Matt Hancock could even find himself facing a TV news veteran at the polling booth. |
| Kay Burley will be out of a job, and she’ll stand in West Sussex and defeat him, because most people in this country would prefer a diversity of ownership of media and we want to keep Sky as independence as possible. | Kay Burley will be out of a job, and she’ll stand in West Sussex and defeat him, because most people in this country would prefer a diversity of ownership of media and we want to keep Sky as independence as possible. |
| Hancock replies that he relishes the prospect of a contest in West Sussex with anyone (!) but doesn’t accept that Sky News will be starved of funds in the future. | Hancock replies that he relishes the prospect of a contest in West Sussex with anyone (!) but doesn’t accept that Sky News will be starved of funds in the future. |
| Here’s a clip of Tom Watson telling parliament that Labour has serious concerns about the proposed sale of Sky News, and that the channel’s ‘independent and rigorous’ independence must be protected. | Here’s a clip of Tom Watson telling parliament that Labour has serious concerns about the proposed sale of Sky News, and that the channel’s ‘independent and rigorous’ independence must be protected. |
| Deputy Labour leader Tom Watson says the priority must be to ensure Sky News retains its independence and "thrives going forward" pic.twitter.com/T4If62oZjH | Deputy Labour leader Tom Watson says the priority must be to ensure Sky News retains its independence and "thrives going forward" pic.twitter.com/T4If62oZjH |