BSkyB takeover decision on hold
Jeremy Hunt, the UK Secretary of State for Culture, Olympics, Media and Sport, said this morning he intends to refer News Corp’s bid to take control of BSkyB to the Competition Commission.
Last June, News Corp announced its offer to acquire the remaining 60.9pc of the shares in BSkyB that it does not already own for £7.8bn. In December, the European Commission approved the proposed acquisition.
News Corp already owns The Times, The Sunday Times, News of the World and The Sun. BSkyB, meanwhile, has two-thirds of the pay TV subscribers in the UK. Rival media outlets have expressed concerns about News Corp's potential dominance in the market if it took over BSkyB.
“On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality,” said Hunt.
He said, however, he will consider any “undertakings in lieu” offered by any of the merging parties that may prevent or otherwise mitigate “the potential threats to media plurality”.
Selling of assets
News Corp was reported last week as being prepared to sell off Sky News or other assets in order to avoid a lengthy review of its bid.
“News Corporation says that it wishes me to consider undertakings in lieu which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference,” said Hunt.
“It is appropriate for me to consider such undertakings. In considering whether to accept undertakings in lieu, I will ask the Office of Fair Trading, under section 93 of the Enterprise Act 2002 as an expert public body with experience in negotiating undertakings in lieu, to be involved in the process from this stage. I will also ask Ofcom under section 106B for advice whether undertakings in lieu address the potential impact on media plurality.
“If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15-day consultation period during which time all interested parties will be able to express their views.”
Article courtesy of Businessandleadership.com