Sky (LON:SKY) has said that it could shut down its Sky News channel if it turns out to be an obstruction to the group’s takeover by Rupert Murdoch’s Twenty-First Century Fox. The news comes with the proposed deal undergoing an investigation by the Competition and Markets Authority (CMA).
Sky’s share price has been steady in London this morning, having added 0.22 percent to 932.00p as of 10:19 BST, slightly outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.02 percent lower at 7,511.37 points. The group’s shares have added more than 15 percent to their value over the past year, but are down by some five percent in the year-to-date.
Sky News at risk
Sky said in a filing with the CMA yesterday that it “would likely be prompted to review” its position should “the continued provision of Sky News in its current form unduly impeded merger and/or other corporate opportunities available in relation to Sky’s broader business”.
“The CMA should not in its assessment simply assume the ‘continued provision of Sky News’ and its current contribution to plurality, ‘absent the Transaction’,” the pay-TV group said in the statement.
Fox’s bid for full control of Sky has suffered a series of setbacks. CNBC meanwhile reported yesterday that the US group had recently held talks about selling some assets to Disney, including its 39 percent stake in Sky.
Liberum upbeat on Sky
Analysts at Liberum meanwhile reiterated their ‘buy’ rating on Sky yesterday, following the news of Fox’s talks with Disney.
“We still see a successful conclusion of the bid as the most likely conclusion, which means the shares offer significant upside, however we understand this news will cause further uncertainty,” the broker’s analyst Ian Whittaker pointed out, as quoted by Citywire.