Man Utd bid is referred to the MMC

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The Independent Online
RUPERT MURDOCH'S pounds 623m bid for Manchester United was dealt a blow yesterday when it was referred to the Monopolies and Mergers Commission.

The Australian media mogul, who holds a 40 per cent stake in BSkyB, had avoided MMC scrutiny so far, despite a series of takeovers which have allowed him to build up a dominant position in the UK's television and newspaper markets.

BSkyB's bid was referred by Peter Mandelson, Secretary of State for Trade and Industry. A two-month investigation by the Office of Fair Trading found that there were sufficient grounds for a wider investigation.

The MMC is now free to conduct a wide-ranging investigation into the UK television industry, as well as the likely future of football.

The decision was warmly received by fans who have opposed the deal, as well as by the Football Association, which has argued for closer scrutiny.

Steve Briscoe, vice-chairman of the Independent Manchester United Supporters Association, claimed the referral was a victory for the ordinary supporter. "It is now time to take a back seat, evaluate our position and let the MMC do their work on this. We'll take it from there," he added.

Mr Mandelson had come under pressure to refer the deal to the MMC. Cabinet ministers, including Chris Smith, Secretary of State for Culture, Media and Sport, and Tony Banks, the Sports minister, had called for the bid to be investigated.

Earlier this week, Karel van Miert, the European competition commissioner, said the deal raised problems.

John Bridgman, the OFT's director-general, found that the bid raised questions about competition in the market for television rights for Premier League football, as well as competition in the wider broadcasting market.

Unusually, the OFT also pointed to public interest concerns raised by the huge vocal opposition to the deal as a reason for an investigation.

A spokesman for BSkyB said the company was still "confident" that the deal would eventually be cleared when the MMC issues its report in March.

Tom Usher, competition law expert at SJ Berwin, the City law firm, said the MMC might call for certain conditions to be attached to the deal.

"Ultimately this bid may drive up the price of watching football. It may be that the MMC try to put something in place where BSkyB are not allowed to put up prices," he said.

Technically, the MMC referral means that BSkyB's bid lapses. However, the television group still controls roughly 25 per cent of the company's shares, effectively blocking a counter-bid while the MMC completes its investigation.

The probe coincides with a court case, starting in January, which challenges the Premier League's ability to award television rights to a single buyer.

In a joint statement, Mark Booth, BSkyB chief executive, and Martin Edwards, chief executive of Manchester United, said the two companies "will put their case strongly to the MMC that the proposed transaction would not operate against the public interest, and should be allowed to proceed."