Sky plc (SKYAY) soared in midday trading in London, after the U.K. Culture Secretary said she was 'minded' to refer for Twenty-First Century Fox Inc's (FOX) - Get Report proposed deal to buy the broadcaster to the regulator on public interest concerns.
Sky shares were up 2.72% to 925.50 pence at 12:13 BST, which is below Fox's offer of 1,075 pence a share.
U.K. Culture Secretary Karen Bradley, Thursday, June 29, said she would now seek further evidence on the deal, before making a decision on whether to refer the deal to the regulator. Parties, including Sky and Fox, have until July 14 to address the public interest concerns.
Bradley told the House of Commons that she was minded to submit proposed takeover to a further 24-week inquiry by the Competition and Markets Authority on the grounds of media plurality.
Bradley said that Fox could off undertakings in lieu to avoid reference to the CMS.
She stressed that these were not her final decision.
Bradley had asked Ofcom, the U.K.'s communication watchdog, and the Competition and Markets Authority to decided where the deal was in the public interest. She also tasked Ofcom with deciding whether Fox was a "fit and proper" owner.
Ofcom, however, concluded the company created by Fox and Sky would meet broadcasting standards and would not refer for a further inquiry.
Fox argued that it no longer holds any U.K. newspaper assets, after a 2013 restructure put them under the News Corp. umbrella, a separate company, where the majority of shareholders and board members are independent.
Ireland approved the merger this week and the European Commission on April 7 gave unconditional approval for the merger after concluding it would not raise competition concerns in Europe.
The decision was delayed in April, after U.K. Prime Minister called a snap election for June 8.
The New York-based company made a play for Sky in December when it sought to acquire the 61% of the company that it does not already own.
Fox's offer is for 1,075 pence per share, which represents a 40% premium to the pre-offer price, and has been recommended to investors by the Sky board.
The deal give's Murdoch control over one of the most powerful pay-TV distribution platforms in Europe.