Sky shares rise as Disney resumes Fox hunt
Shares in Sky were lifted on Monday after reports that Walt Disney has restarted talks with Rupert Murdoch’s 21st Century Fox over acquiring most of the broadcaster's assets, including the stake in the UK business.
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Fox, which is controlled by Murdoch and his sons, is negotiating the potential sale of its film studio, cable channels and international businesses, which include India’s Star network and Sky, the Financial Times reported on Sunday.
UK regulators are currently scrutinising Fox's £11.7bn bid to take full control of Sky, with the government having admitted some concerns about broadcasting standards and UK media plurality.
Fox, where Murdoch's younger son James is chief executive officer, has a 39% stake in Sky, where James is also chairman.
Talks with Disney are not exclusive, with Fox also said to be engaging with US cable networks Comcast and Verizon Communications, according to the Wall Street Journal.
Investors have bid up Fox's shares, noted analysts at Citi, who said "questions remain" on potential tax leakage.
Citi sees the "most likely" scenario as a swap of Disney's sports assets, namely ESPN, for Fox assets such as the film studio, non-sports cable networks, Hulu and the Sky stake.
"This would put both firms on a firmer strategic footing and reduce tax leakage," Citi said, adding that it expects the swap will occur.