"The CMA's language in its remedies suggests a greater risk of the deal not occurring", said Whittaker. A third option is to block the deal outright. Yet somewhat surprisingly shares in Sky are up 2.5% to £10.29 on the news.
Shares in Sky rose on Tuesday as investors said concerns about Murdoch's influence could still be overcome, for example by spinning off Sky News, Britain's first 24-hour news channel.
However some deal may go through as Disney is now negotiating with Murdoch's Fox to buy its film studios plus other assets, including its stake in Sky.
The proposed takeover of Sky, owner of Sky News, values the whole of the company at £18.5bn. However, that would leave Fox with a £200m bill for backing out, and there is no guarantee the Disney deal will get regulatory clearance to take over Fox. On top of that Sky is still in the flawless position to capitalise on convergence, better than most, but they need an owner who understands the market in order to benefit. A brand licensing agreement would maintain the Sky News name. But the authority said there was no way to guarantee when or if Disney's takeover of Fox will be completed so the British government's review of the Sky merger must go forward. This would immediately eliminate the media plurality issue. According to a recent media report, Sky has signaled it would offer to make concessions on Sky News, such as putting it in the hands of an independent trust.
The CMA said the transaction may be against the public interest, taking into account the need "for there to be a sufficient plurality of persons with control of the media enterprises".
However, the CMA found the deal would not be against the public interest on the grounds of broadcasting standards.
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The Sky News reported that both the leaders are expected to meet for bilateral talks in the sidelines of the summit. The theme of the meeting, spread over 400 sessions, would be " Creating a Shared Future in a Fractured World ".
Fox said in a statement that it was disappointed by the CMA's findings. The News Corp newspapers had improve their compliance with standards since the phone-tapping scandal in 2012, the CMA found.
We also note that the CMA has elected to avail itself of the statutory 8-week extension, moving its deadline for a final decision to May 1, 2018. Hancock will then make the final decision on the proposed deal.
Mr. Murdoch's company already owns 39 per cent of Sky and tabled their £11.7 billion bid for full control in 2016.
There was some good news for the companies, however.
Almost seven years after revelations about the scale of criminality at the company, and the corporate cover up that was launched in an attempt to keep it hidden, there are still ongoing civil cases alleging criminality by Murdoch papers. This was previously seen as a major obstacle to the deal progressing. Judging by 21st Century Fox's press statement, you would think this decision brings them a step closer to the takeover, rather than a step further away.