Liberum has lowered its rating on Sky (LON:SKY), noting that there is a 40-percent chance that the FTSE 100 group’s deal with Rupert Murdoch’s 21st Century Fox would not go through. The comments came after the Competition and Markets Authority (CMA) ruled yesterday that the US group’s acquisition of the London-listed pay-TV provider was not in the public interest.
Sky’s share price rose in the previous session regardless, adding 2.29 percent to close at 1,062.00p. The stock outperformed the broader UK market, with the benchmark FTSE 100 index adding 16.39 points to close 0.21 percent higher at 7,731.83.
Liberum trims rating
Liberum trimmed its rating on Sky from ‘buy’ to ‘hold’ yesterday, lowering its price target on the shares from 1,060p to 930p. Citywire quoted the broker’s analyst Ian Whittaker as commenting that “concerns over the Murdoch family having too much influence over the UK news landscape was not entirely unexpected nor surmountable but the CMA’s language in its remedies suggest a greater risk of the deal not occurring, which had been the main driver of our ‘buy’ case”.
The comments came after the CMA explained yesterday that he proposed tie-up would lead to the Murdoch Family Trust having too much influence over public opinion and the political agenda. The watchdog, however, outlined potential remedies.
Whittaker further pointed out that there was now a 40-percent “chance the deal does not go through”.
Other analysts on Sky
Shore Capital reiterated its ‘hold’ rating on the stock last week, without specifying a price target on the shares. According to MarketBeat, Sky currently has a consensus ‘buy’ rating and an average price target of 1,058.13p. Sky is scheduled to update investors on its half-year performance tomorrow.