UK Culture Secretary: Divestment of Sky News to Disney Meets Criteria -- Update

(Adds details on the proposed terms)

 
    By Adria Calatayud 
 

The British culture secretary, Matt Hancock, said Tuesday that revised terms offered by 21st Century Fox Inc. (FOX) to divest Sky PLC's (SKY.LN) news operations to Walt Disney Co. (DIS) meet the criteria to approve Fox's bid for the 61% stake in the U.K. pay-TV group it doesn't already own.

On June 5, Mr. Hancock said the sale of Sky News to Disney or to an alternative suitable buyer could remediate media plurality concerns caused by a potential deal, but laid out a timeline of 15 days to reach a deal. The culture secretary will now open a 15-day public consultation and is expected to make a final decision after July 4.

Both Sky and Fox welcomed Mr. Hancock's statement in separate releases.

Under Fox's latest proposal, Sky News would be divested to Disney following the close of the Sky transaction, and Fox has committed to increase its funding of Sky News to 15 years under Disney's ownership, the company said.

Sky is 39%-owned by 21st Century Fox (FOX), which shares common ownership with News Corp (NWS), the parent company of Dow Jones.

The improved undertakings offered by Fox include a commitment from Disney to operate and maintain a Sky News branded news service for 15 years, an extension of the funding committed by Fox to 15 years and an increase in the total funds available to Sky News to at least 100 million pounds ($132.5 million) a year, Mr. Hancock said. Disney would be restricted from selling Sky News for 15 years without the consent of the culture secretary and would be required to commit to preserve the editorial independence of the news service, he said.

In December 2016, Fox offered GBP11.7 billion ($14.6 billion at the time) for the stake in Sky PLC it doesn't already own. However, that proposal was topped by a GBP22 billion bid from Comcast Corp. (CMCSA) earlier this year. Comcast said last week that it would post an offer document to Sky shareholders, after the European Commission approved its takeover proposal. The Comcast bid was cleared by British regulators earlier this month.

Read more about the Sky takeover at https://on.wsj.com/2GVUM2A (WSJ paywall) or https://bit.ly/2KKyeTZ (NewsPlus).

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

June 19, 2018 11:38 ET (15:38 GMT)

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