Lifestyle & Entertainment

Sky falls as report of Disney-Fox talks increase deal uncertainty

The Sky News logo is seen on the outside of offices and studios in west London, Britain June 29, 2017. REUTERS/Toby Melville

LONDON (Reuters) – A report that Rupert Murdoch held talks about selling film and television assets to Walt Disney Co <DIS.N> added another layer of uncertainty to his $14.5 billion bid to buy all of Britain’s Sky <SKYB.L>.

Disney recently discussed buying Twenty-First Century Fox’s <FOXA.O> movie and TV production studio studios, cable networks FX and National Geographic and international assets such as the Star network in India and its stake in Sky, CNBC said on Monday.

The talks were not currently ongoing, the broadcaster said.

Fox has bid 10.75 pounds a share to acquire the remaining 61 percent of Sky it does not own, but the deal is tied up in regulatory purgatory until the middle of next year.

Shares in Sky, which on Monday briefly fell to 893 pence, the lowest level since the deal was announced, were trading down 1.3 percent at 927.5 pence at 1110 GMT.

Analysts at Liberum said they still saw a successful conclusion of Fox’s bid for Sky as the most likely outcome, but the Disney-Fox talks had thrown a curveball into the deal.

They said Fox may scrap its bid for Sky as part of a proposed sale of assets, and they also noted that Fox’s willingness to consider including the Sky stake in any sale could be seen as a signal that it feels less confident of gaining regulatory approval from the British government.

UBS, however, said a combination of Disney and Fox content could strengthen the rationale for buying all of Sky.

The British company was already starting to build a pan-European streaming platform with its Now TV and Sky Ticket products, and the addition of content from Disney as well as Fox would only make that more compelling, it said.

The bank also said in the event that a Fox/Sky deal was blocked, based on the CNBC article, Disney could be a potential strategic bidder for Sky and it noted it would not have the cross-media complications of a Fox bid.

Fox and Sky both declined to comment.

(Reporting by Paul Sandle; Editing by Keith Weir)

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