Fox shares dropped 3.3% in mid-day trading today after The Guardian reported that the company probably won’t make a deal with the UK government to win approval for its $14.6 billion bid to acquire the 61% of Sky that it does not own.
At issue is whether the transaction, which includes Sky News, would give Fox’s Rupert Murdoch too much clout over the country’s news. That’s a sore point for many following the company’s role in the News Of The World phone hacking scandal. In 2011 it forced then-News Corp to scrap its BSkyB bid.
Culture Secretary Karen Bradley told the company that it had until Friday to offer ways to protect Sky News’ independence if it wanted to avoid having her refer the deal to the Competition Markets Authority for further scrutiny. A review there could take up to six months.
She said last month that she was “minded” to make the referral.
“The transaction raises public interest concerns as a result of the risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process, with its unique presence on radio, television, in print and online,” she said at the time.
British regulator Ofcom also raised concerns about Murdoch’s media clout. In response, he agreed to keep Sky News going for five years with its own editorial board.
Bradley said that was insufficient.