- UK Media Secretary Karen Bradley on September 12 said she was minded to refer 21st Century Fox's bid for broadcaster Sky to the country's competition regulator on the grounds of its commitment to broadcasting standards.
Addressing parliament today, Bradley said: "I am now minded to refer the merger to the CMA [Competition and Markets Authority] on the grounds of genuine commitment to broadcasting standards".
Fox, the world's fourth-largest media company after Comcast, Disney and Time Warner, already owns a 39.1% stake in Sky.
The scope of the planned CMA referral surprised investors, given Ms Bradley had initially said she was inclined to confine the review to questions of media influence.
Ms Bradley said she received 43,000 comments on the deal, a lot of them part of activist campaigns against the merger going ahead.
The British government's intention to seek a full review of 21st Century Fox's bid for Sky is unlikely to derail the takeover, analysts say, even though opponents of the deal hailed the decision as a "golden opportunity" to sink the $15-billion agreement. "Ofcom has now confirmed it considers this to raise non-fanciful concerns but which are not sufficiently serious to warrant referral. These are matters the CMA may wish to consider in the event of a referral", she finished.
21st Century Fox Inc on Tuesday urged UK Culture Secretary Karen Bradley to make a final decision on Fox's takeover of the remaining 61% of Sky PLC it does not already own "quickly". Her volte face on having the CMA look at a combined Fox-Sky's commitment to upholding broadcasting standards was criticized by Fox, which noted that her decision went against Ofcom's guidance. "However, it is clear to me that Parliament intended the scrutiny of whether an acquiring party has a "genuine commitment" to attaining broadcasting standards objectives to happen before a merger takes place".
She told MPs: "I consider that these non-fanciful concerns do warrant further consideration".
To seal the deal, Fox had earlier this summer proposed conditions, or "undertakings", focused on maintaining the editorial independence of Sky News by establishing a separate editorial board, with a majority of independent members, that would oversee the appointment of the head of Sky News and any changes to Sky News editorial guidelines.
Following Bradley's referral, Sky stock sunk nearly 4 percent. She was not confident that weaknesses in Fox's corporate governance arrangements were incapable of affecting compliance in the broadcasting standards context.
She said one area raised by critics of the deal was "what they termed the "Foxification" of Fox-owned news outlets internationally".
The deal's progress has already been set back by the upheaval of the United Kingdom general election, the furore over racial and sexual harassment allegations at Fox News and obstruction by the deal's opponents.
Bradley was under high pressure to carry out further investigation.
Wigdor, which is pursuing several cases against Fox News, said: "We are pleased that after our submissions Secretary Bradley has concluded that a further investigation is necessary in order to determine whether Fox has met broadcasting standards and are hopeful that Fox will now waive any gag orders so that other individuals can provide relevant information without fear of reprisal".