Just a few days after some shareholders had raised concerns over its pricing, Sky and 21st Century Fox have confirmed the reaching of an agreement on the terms of a takeover deal, with the latter set to pay GBP11.7 billion (USD14.6 billion) for the 61% stake it does not already own in the broadcaster. According to the BBC, Sky shareholders will receive GBP10.75 in cash for each share, valuing the entire company at GBP18.5 billion, though the deal may yet face roadblocks should the authorities decide it raises public interest concerns. UK culture secretary Karen Bradley will have ten days from the date that the companies notify the Competition and Markets Authority (CMA) of the deal to decide whether that is the case, and if so whether to refer the matter to media and telecoms watchdog Ofcom to examine.
Already calls are being made for such a referral, with shadow culture secretary Tom Watson urging the culture minister to task Ofcom with studying the deal, while a number of Sky shareholders, such as Standard Life Investments and Jupiter Asset Management, have previously questioned the independence of the company’s non-executive directors and their ability to secure a higher price for the shares. Meanwhile, Richard Marwood, senior fund manager at Royal London Asset Management – which holds a 0.36% stake in Sky – has reportedly urged Sky’s board to share more information on the independent financial advice that it based their agreement with Fox on, with the report citing him as saying: ‘Such disclosure would help shareholders assess the fairness of the offer and give greater confidence in the independence of the committee in the bid process.’ With 21st Century Fox planning to buy the shares it does not hold in Sky through a scheme of arrangement, it is noted that that this means it requires the approval of investors holding 75% of the shares.