News Corp offers EC concessions for Sky bid

Nikhil Kumar
Friday 03 December 2010 01:00

Rupert Murdoch's News Corporation has reached out to the European Commission by offering specific commitments as it seeks to ease potential concerns over competition prompted by its plans to take over the satellite broadcaster BSkyB.

In response, the Commission has allowed 10 extra days for the first phase of its inquiry into the planned £12bn deal, extending the deadline from 8 December to 22 December.

No details were made public, but it is understood that New Corp, which is seeking to raise its 39.1 per cent stake in Sky to full ownership, has not offered any asset sales.

The company declined to comment on the nature of the commitments offered to Brussels. A spokeswoman said only that the media group "continues to work constructively" with the Commission.

The saga dates back to June, when News Corp first approached Sky's independent directors with a bid valued at 700p per share. The gambit failed, with the directors holding out for at least 800p per share. The two companies did, however, agree to co-operate in addressing any competition and media plurality concerns. And after a lull over the summer, News Corp lodged its intention to bid with the commission in November.

Shortly afterwards the UK's Business Secretary, Vince Cable, referred the case to Ofcom for a separate investigation into the proposal's effect on media plurality in the UK.

Mr Cable's intervention followed mounting calls from rival media groups, which raised concerns about the potential dominance of a combination of News Corp and Sky.

It would bring together Sky's satellite TV business, with more than 10 million customers; with News Corp's UK newspaper publishing unit, News International, which includes The Times, The Sunday Times, The Sun and The News of the World.

Ofcom is due to report at the end of this month. Once its findings are presented, Mr Cable must decide whether or not to refer the matter to the UK's Competition Commission.

If a referral is made, the Competition Commission will only consider plurality issues, not the impact on competition. The latter falls within the ambit of the European inquiry.

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