Fox’s bid for Sky hits a snare

A major shareholder in British pay-TV company Sky tells Reuters it will vote against Twenty-First Century Fox’s $14 billion takeover bid in its current form. Jo Webster reports.

(REUTERS / SKY COMPANY) – A major shareholder in Sky TV will vote against Twenty-First Century Fox’s 14 billion dollar takeover bid.

The investor telling Reuters that the bid is – quote – “far too low”.

A second stakeholder saying it is also unhappy with the deal.

Chris Beauchamp, Market Analyst, IG,

“I think it’s the whole regulatory hurdle that will be the major issue here. There’s a lot of people who will look with disfavour upon this move. I think the question’s not just in terms of the competition between Sky and Fox News and their dominance in that sphere, but it’s just the fact that, again, you’ve got that move by a media mogul whose reputation, if you like, has been firmly established in many people’s minds. So I think a lot of regulators will be keen to run this one under the microscope as much as possible, slow it down as much as possible.”

Rupert Murdoch’s Fox offered 10 pounds and 75 pence a share in cash on Friday – in its second attempt to buy 61 percent of the business that it doesn’t own.

The deal would give Fox control of a pay-TV network spanning 22 million households in Britain, Ireland, Austria, Germany and Italy.

Sky’s independent directors back the latest offer.

But analysts at Citi bank have described it as a “low-ball bid”.

Reuters sources say Fox pounced after June’s Brexit vote hit the pound and sent Sky’s share price tumbling.

A Sky spokeswoman declining to comment.