James Murdoch has warned the Government that 21st Century Fox’s £11.7bn takeover bid for Sky is a test that Brexit Britain is “truly open for business”.
The Fox chief executive’s intervention will be interpreted as a direct challenge to Theresa May’s administration as it mimics the Government’s oft used mantra that, despite exiting the EU, the single market, the customs union and taking an ultra hardline stance on immigration, Britain is “open for business”.
“There is a huge opportunity for companies and countries willing to act decisively and capitalise on the economic and social benefits that this industry can create,” he said at the Royal Television Society convention. “Inward investment in the UK creative economy and the positive signal it sends to companies around the world is more important than ever as the UK prepares to chart its course outside the EU.
“If the UK truly is open for business post-Brexit, we look forward to moving through the regulatory review process and this transformative transaction for the UK creative sector becoming an affirmation of that claim.”
He was speaking shortly after Culture Secretary Karen Bradley confirmed the deal will be referred to the competition watchdog for an in-depth probe.
21st Century Fox is controlled by the Murdoch family – Rupert and his sons Lachlan and James – and is attempting to seize control of the 61 per cent of Sky it does not already own.
But the deal has hit a roadblock after Ms Bradley’s decision, made on the grounds of broadcasting standards and media plurality. Earlier this week, Ms Bradley told MPs she was likely to refer the deal to the Competition and Markets Authority (CMA) for a full-blown investigation.
On Thursday she confirmed the move after disclosing that Fox and Sky would not be making substantive representations in relation to the decision. Ms Bradley said: “As a result, I can confirm my final decision is to refer the merger to the CMA for a Phase 2 investigation on media plurality and genuine commitment to broadcasting standards grounds.
“I will issue and publish my formal referral decision in the coming days. I will also publish the substantive representations I have received during this process shortly.”
The CMA has around six months to investigate the merger and provide Ms Bradley with advice, after which she must then come to a final decision on whether or not the merger can proceed, including any conditions that will apply in order to do so. The CMA faces the task of delving into claims of misconduct at Fox, which have ranged from alleged racial and sexual harassment to making up quotes.
Rupert Murdoch’s latest approach comes after his last attempt at taking over the business through News Corporation in 2011. The tilt faced opposition from media industry rivals and politicians before it was scuppered by acute pressure on the company, brought about by phone-hacking claims involving News International.
For its part, Sky said that it notes the swift decision to refer the deal to the CMA and will “continue to engage constructively in this process”. Fox said it is looking forward to “engaging constructively with the CMA”.
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