Government keeps 21st Century Fox waiting on Sky takeover decision

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Rupert Murdoch is executive chairman of 21st Century Fox (Source: Getty)

The government kept Rupert Murdoch’s 21st Century Fox waiting again today, with no decision made on its takeover of Sky.

The Department for Digital, Culture, Media and Sport (DCMS) said it had received further information from broadcast regulator Ofcom after requesting extra guidance last month.

In a statement, the DCMS said that culture secretary Karen Bradley would now consider the evidence and make her decision on the deal “as soon as is reasonably practicable”.

The statement, which did not provide a timeframe for when any announcement will be made, comes more than two months after Bradley first said she was “minded to” refer the deal to the Competition and Markets Authority (CMA) for a full, phase two investigation.

The lack of decision is likely to frustrate Fox, whose executives warned the government in July that “important investment decisions will inevitably need to be deferred” while they await clarity from Bradley.

The delay also increases the chances that the deal will not complete by 31 December this year, Fox’s original deadline target. Under the terms of the deal, Fox will be required to pay out a special dividend of 10p to Sky shareholders if the transaction is not completed before 2018. In these circumstances, £67m would go to Fox, which already owns a 39 per cent stake in Sky, and £104m would go to other shareholders.

“For Fox this lengthy process might feel like Waiting for Godot, the iconic Beckett play,” said Alex DeGroote, a media analyst at Cenkos. “For Sky investors, the market seems to be slowly discounting the probability of a successful bid this side of Christmas.”

Analysts in general expect Bradley to refer the deal for a full probe by the CMA, which would have 24 weeks to carry out its investigation. DeGroote expects the deal to complete in the second or third quarter of next year. Analysts at Liberum and Berenberg are expecting first-half and first-quarter completion respectively.

Sky’s share price dropped 0.6 per cent to 950p today, around its lowest level since Fox’s 1,075p-per-share takeover bid in December last year.

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