Rupert Murdoch’s 21st Century Fox has been given the Government’s all-clear to take over Sky but faces a battle to see off rival suitor Comcast after it upped its bid.
Newly appointed Culture Secretary Jeremy Wright said he agreed with his predecessor’s final decision to accept Fox’s planned sale of Sky News to Disney should it succeed in buying Sky – a move clearing the final regulatory hurdle for Fox.
But it comes after the takeover saga stepped up a gear as Comcast increased its offer for Sky to £26 billion, just hours after Fox hiked its bid to £24.5 billion.
All eyes will now turn to Fox to see if it will increase its offer for the 61% of Sky that it does not already own.
In a written statement, Mr Wright said: “The publication of the undertakings marks the final stage of the public interest consideration of this case.
“It is now a matter for the Sky shareholders to decide whether to accept 21st Century Fox’s bid.”
Mr Wright only took over as Culture Secretary on Tuesday after the latest Cabinet reshuffle, replacing Matt Hancock, who became health secretary.
He said amended guarantees had been made over Sky News to address concerns over media plurality, as well as changes to the associated brand licensing agreement following responses to the Government’s consultation.
Under its plans to appease Government concerns, Fox has pledged to offload Sky News to Walt Disney, which is separately bidding to buy a major chunk of Fox assets – including the Sky stake.
Fox has also vowed to provide a Disney-owned Sky News channel with funding of at least £100 million a year for 15 years.
The Government had been concerned over the impact that Fox’s takeover of Sky could have on UK media, given that the Murdoch family also owns News Corp – the publisher of a raft of newspapers including The Sun and The Times.
Mr Hancock had told Parliament that if terms of a sale of Sky News could not be agreed, the “only effective remedy now would be to block the merger altogether”.
Sky’s shares were trading 3% higher as investors were betting on a higher bid from Fox to see off Comcast’s competition.
Comcast turned up the heat overnight with a new £14.75-a-share proposal, up from £12.50 previously.
It came after Fox raised its bid to £14 a share on Wednesday from the £10.75 a share offered when it first made a bid for Sky 18 months ago.
Fox will be hoping to see off competition from Comcast after a long battle to buy the remaining stake in Sky, having faced heavy scrutiny from the Government and the competition watchdog.
The Government has already separately cleared Comcast’s bid for Sky.
Sky has been thrust into the centre of a global tussle between media giants Disney and Comcast as they lead a fightback against the might of Amazon and Netflix.
While Fox has agreed to sell most of its assets to Disney, Comcast has also made an all-cash offer for the Fox assets separate to its offer for Sky.