DIS Walt Disney Co

By Ben Dummett 

21st Century Fox Inc. on Tuesday said Walt Disney Co. was prepared to buy Sky PLC's news channel, a move that would help Fox consolidate its ownership of the European pay-TV operator.

The possible sale of Sky News to Disney is Fox's latest attempt to allay concerns in Britain that a takeover of Sky would give Rupert Murdoch too much influence over the country's media.

It comes as Disney pursues a separate $52 billion bid to acquire much of Fox, including its film studios and stake in Sky. Fox said Disney is open to acquiring Sky News even if the larger transaction doesn't proceed.

Disney's interest in acquiring the news channel is the latest twist in a complicated takeover battle that pits Disney and Fox against Comcast Corp., the U.S. cable giant, in a battle for content and subscribers. Disney views Sky as an important component of its deal for Fox and key to its plans to expand its international footprint.

Fox, which currently owns 39% of Sky, in December 2016 launched its $16 billion bid to acquire the rest of the broadcaster that it doesn't already own. The deal has faced a series of regulatory hurdles. In a preliminary finding earlier this year, U.K. antitrust authorities said Fox's full ownership of Sky and its Sky News business would give Mr. Murdoch too much influence over British media.

The Murdoch family controls a 39% voting interest in both Fox and News Corp, a major U.K. newspaper publisher with titles including the Sun, the Times of London and the Sunday Times. News Corp also owns The Wall Street Journal.

Earlier this year, Fox said it would take steps to ensure the independence of Sky News to win support from regulators. On Tuesday, it indicated a willingness to go further.

It could sell Sky News to Disney. Alternatively, it said it could establish Sky News as a separate company within the bigger Sky group, with an independent board. It also pledged 15 years of guaranteed funding for the news channel.

"The enhanced remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the [U.K. Competition and Markets Authority's] provisional concerns," Fox said.

Disney wasn't immediately available for comment.

Still, completion of the Fox-Sky deal is far from certain even if antitrust authorities sign off on the pact and the U.K. government approves it.

At least 75% of Sky's shareholders, not including Fox, need to support the takeover, which faces competition from Comcast.

In February, Comcast announced plans to bid GBP22.1 billion (concersion), or GBP12.50 a share for all of Sky, well above Fox's offer of GBP10.75 a share.

Sky currently trades higher than the Comcast proposal, indicating that investors expecting a bidding war. Sky shares were up 1% at GBP13.10 in morning trading in London.

--Adria Calatayud contributed to this article.

Write to Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

April 03, 2018 05:16 ET (09:16 GMT)

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