Economy

UK's takeover authority says Disney must acquire Sky if Fox bid fails

UK's takeover authority says Disney must acquire Sky if Fox bid fails

However Disney argued that if Fox's attempt to buy the remainder of Sky were to be blocked, it should not be forced under takeover rules to try to do so itself.

Any deal Disney is required to make for Sky would cost the same as Fox's bid for the operator and would only be required if Fox doesn't close its deal for Sky first.

The Takeover Panel also ruled that Disney would have to match Fox's £10.75 (Dh56.03) a share offer for the Sky stocks, which is the same offered by Fox for the company stocks which it doesn't already hold.

Analysts had said Disney wanted a special dispensation to give it more flexibility in terms of whether or when it would bid for the rest of Sky if it only bought the 39 per cent stake from Fox. "The basis for this ruling is that, in accordance with paragraph (b) of Note 8 on Rule 9.1, the Executive considers that securing control of Sky might reasonably be considered to be a significant objective of Disney's acquiring control of Fox", the independent body noted.

In the UK on Thursday 12 April, a takeover panel ruled that Disney will have to buy up pay TV provider Sky UK - if Fox's takeover of the unit stalls.

Earlier in April, Fox proposed two remedies to address plurality concerns voiced by United Kingdom mergers regulator the Competition & Markets Authority.

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The ruling settles months of speculation regarding whether Disney would have to make a direct bid for Sky after Disney's December offer for the bulk of Fox's media and entertainment assets.

The three companies - Sky, Fox and Disney - signed a confidentiality agreement in March.

However, the CMA has suggested remedies for Sky and Fox to address these issues.

Sky separately said that shareholders should not take any action, and further advice will be announced in due course.

Fox proposed create a independent and separately run company for Sky News.

Mr Watson, who is shadow culture secretary, said the news of the raid of Fox's office is "concerning".