Britain intends to refer Rupert Murdoch's takeover of Sky to a full investigation because the deal raises concerns about the amount of influence the media mogul would wield. As Kate King reports, 21st Century Fox has until the 14th of July to convince the government otherwise.
It was the news Rupert Murdoch didn't want to hear. His proposed 14.5 billion dollar take-over of British Pay TV firm Sky - stalled by the UK government. The media mogul's ability to influence public debate, the main concern. SOUNDBITE(English) UK CULTURE MINISTER, KAREN BRADLEY SAYING: "The proposed entity would have the third largest total reach of any news provider, lower only than the BBC and ITN and would uniquely span news coverage on television, radio, in newspapers and online." Murdoch's 21st Century Fox now has two weeks to submit its response, before the Competition Markets Authority is called in to scrutinise the deal further. That delay, could potentially force Fox to pay a special dividend for failing to get take-over done in time. SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM SAYING: "Sky was trading this morning was over 10 percent shy of the ten point seventy five offer price for a 21st Century Fox perhaps indicating that the market has some concerns that this deal isn't necessarily just going to be simply waved through." Shares in Sky rose after the statement, trading up 3 percent Owning the business outright would give Murdoch control of a pay-TV network spanning 22 million households in Britain, Ireland, Austria, Germany and Italy. Critics had worried the government would try and push the deal through as a sign of confidence in the UK economy. SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM SAYING: "Murdoch and the family you know remain somewhat controversial characters and ultimately this is going to be a political decision." Six years ago a previous take-over attempt failed when Murdoch's British newspaper arm was engulfed in a phone hacking scandal. He tried to make a new deal more palatable by splitting Fox's newspaper and tv interests. But it seems more convincing is needed, especially with Fox currently embroiled in a U.S. sexual harassment lawsuit.