Government to be 'fair and impartial' on Sky takeover bid

A minister has said that the Government will be "scrupulously fair and impartial" in its handling of 21st Century Fox's takeover bid for Sky (Frankfurt: 893517 - news) , the owner of Sky News.

Replying to an urgent question in the Commons, Matt Hancock said procedures were being put in place to ensure Culture Secretary Karen Bradley can make an objective decision about the proposed deal if necessary.

"The role of secretary of state here is a quasi-judicial one and it's important she acts independently and is not subject to improper influence," the culture minister told MPs (BSE: MPSLTD.BO - news) .

Mr Hancock added that guidance is being drawn up for ministers and officials dealing with interested parties in the bid.

Currently, 21st Century Fox owns 39.1% of Sky. The international film and television company's cash offer values Sky shares at 1075p each - putting a valuation on the company of £18.48bn, less the value of any dividends subsequently paid by Sky.

The Government has not yet received formal notification of the proposed takeover.

Mr Hancock told the Commons: "The guidance makes clear that the secretary of state will aim to take an initial decision on whether to intervene within 10 working days of formal notification of the merger to the competition authorities, or the transaction being brought to her attention. No such formal notification has yet been received."

MPs in the Labour Party have raised objections to the proposed takeover of the European entertainment company.

Shadow culture minister Kevin Brennan raised concerns that a takeover could concentrate media power in the hands of the few.

Former Labour leader Ed Miliband recalled that MPs unanimously rejected a previous takeover bid, saying: "We still have issues of phone hacking unresolved in the courts and we still have a system of self-regulation that has not satisfied victims of phone hacking."

Five years ago, News Corporation (Frankfurt: A1W048 - news) - Rupert Murdoch's media giant - tabled an £8bn takeover bid for the shares in Sky, then called British Sky Broadcasting, that it did not already own.

The deal attracted scrutiny because it would have brought together Sky News with News Corporation's UK media assets, including The Sun, The Times, The Sunday Times and the News of the World.

This attracted criticism from rivals of those newspapers about a concentration of media ownership and, in response to regulatory concerns, BSkyB agreed to hive off Sky News as a separate company.

However, in July 2011, News Corporation abandoned its offer when it emerged that the News of the World had hacked the mobile phone of murdered schoolgirl Milly Dowler.

News Corporation subsequently demerged its film and television assets outside Australia into a new company, 21st Century Fox, leaving it as a business focused on newspaper titles from around the world.

Apart from UK titles such as The Sun and The Times, it also owns The Wall Street Journal, The Australian and The New York Post - and the book publisher Harper Collins.

There are likely to be fewer concerns from rivals of either Sky or the UK newspaper businesses owned by News Corporation about a concentration of the news market.

Speculation has mounted about a possible deal in recent months due to the fall in the pound against the US dollar - reducing the value of Sky, whose shares are quoted in sterling, in dollar terms.