Twenty-First Century Fox Inc. (FOXA) has offered to ringfence Sky News and possibly sell it to the Walt Disney Co. (DIS - Get Report) in its bid to gain approval for its acquisition of Sky plc (SKYAY) .
Disclosures by Britain's Competition and Markets Authority on Tuesday, April 3, show that Fox has offered to transfer Sky News to a newly set up private company, known as Newco, as soon as reasonably possible after the Sky acquisition closes. Fox in a Tuesday statement said that Disney has expressed interest in buying the news channel whether or not Disney's proposed $66 billion acquisition of Fox's entertainment assets proceeds.
Fox in February Fox pledged as part of its so-called "firewall remedies" for Sky News to maintain and fund a fully independent Sky News for at least 10 years.
"We have worked diligently with the CMA throughout its extensive review," Fox said. "In fact, we believe that the enhanced firewall remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA's provisional concerns. These enhanced remedies went above and beyond what Ofcom, the expert, independent regulator on UK broadcasting, had stated would mitigate concerns around media plurality.
Fox's proposed $15.5 billion acquisition on Sky, which was first announced in December 2016, has come under further pressure after Comcast Corp. made a surprise £22.1 billion ($30.4 billion) bid for Sky.
Action Alerts Plus holding Comcast (CMCSA - Get Report) has offered to Sky shareholders £12.50 per share in a bid valuing Sky at $31 billion, or $41 billion including assumed debt, topping bid of £10.75 from Fox.
Sky shares were trading at £13.11, 1.04% higher than their Thursday close.
"Sky believes that both of these remedy proposals comprehensively address any plurality concerns the CMA may have, and would guarantee the long-term future of Sky News and its ongoing editorial independence," the company said in a Tuesday statement.
The concessions enhance a number of the remedies offered in the first phase of the CMA's investigation, Fox said, adding that the proposed "firewall remedies" are tailored to address the CMA's concerns that the Murdoch Family Trust would have undue influence over U.K. media.
The CMA on Jan. 23 said the decision to provisionally block the deal the impact the purchase would have on "media plurality" in the U.K., given the dominance Fox would have over the domestic media landscape and the fact that Murdoch Family Trust assets are watched and read by a third of the population, and the influence it would have over the Sky News channel.
The regulator, however, proposed a series of remedies that would allow for the deal to go through, including the sale of Sky News to a third party or the "insulation" of the channel from the Murdoch Family Trust's influence.
The CMA will make its final decision about the Sky takeover, with a report submitted to the Secretary of State by May 1.
Elliott Management Corp. has been steadily building a stake in Sky, and now has a 2.8% stake.