21st Century Fox Inc. urged media watchdogs in the U.K. and the European Union to launch probes into Comcast Corp.'s proposed takeover offer for Sky plc, in a bid to slow down the U.S. cable giant's push for the British pay TV company.
Fox CFO John Nallen called for an in-depth investigation into the bid's unusual structure, as well as Comcast's compliance record on broadcasting and antitrust standards, The Daily Telegraph reported March 7. He suggested that the extent of Comcast's influence and conduct as a "global news organization" may be in conflict with broadcast rules as implemented by British media regulator Ofcom.
In response, a source close to Comcast reportedly said the cable company does not face the same regulatory challenges as Fox. These include the latter's ownership structure, the plurality of its media assets and its governance standards.
Comcast is working to outpace Fox as it has already contacted Ofcom and EU watchdogs, according to an earlier report. The company is also working on detailed filings and has already tapped lawyers to prepare for regulatory approval by the summer.
However, Comcast has yet to make a firm offer for Sky and is reportedly unlikely to do so for several weeks.
Late last month, Comcast proposed to offer £12.50 per share for Sky, valuing the pay TV broadcaster at about £22 billion. The bid directly challenges Fox's bid of £10.75 per Sky share. Comcast's proposed terms represent a premium of about 16% compared to Fox's offer of about £11.7 billion for the nearly 61% of Sky that Fox does not already own.
Fox, nevertheless, confirmed it "remains committed" to its existing offer to take full control of Sky. The former was reportedly under increased pressure to hike its offer after Sky secured a range of Premier League rights packages under a three-year contract for £1.19 billion per year.
The Fox/Sky transaction is facing intense regulatory scrutiny in Britain. In January, the U.K. Competition and Markets Authority provisionally ruled that the proposed transaction would not be "in the public interest" on media plurality grounds, as a takeover by Fox would place Sky News (UK), The Times and The Sun all in the hands of the Murdoch Family Trust.
To satisfy regulatory concerns, Fox offered "firewall remedies" at Sky News, which included the creation of an independent editorial board to set the editorial strategy and direction for the organization's content. Fox also offered to fund Sky News for at least 10 years.
Comcast previously launched an offer to acquire Fox, but lost out to Walt Disney Co., which offered in December 2017 to buy Fox's international and domestic assets for about $52.4 billion. The assets include Fox's stake of roughly 39% in Sky.
Prior to announcing its takeover bid for Sky, Comcast was reportedly considering reviving its bid for Fox.
When contacted by S&P Global Market Intelligence, a spokesman for Fox declined to comment.
