Twenty-First Century Fox Inc. (NASDAQ:$FOXA) hit another roadblock today in its proposed acquisition of the remaining 61% stake in Europe’s leading pay-TV broadcast Sky. This came after U.K. Culture Secretary Karen Bradley demanded a detailed review from the Competition and Markets Authority (CMA).
Bradley alluded that the review is to be implemented under “potential public interest concerns”. But the surprising part was that she now wants reviewers to examine Twenty-First Century’s adherence to broadcasting standards.
This is a major setback for FOXA, as the deal is valued at $15.2 billion to strengthen the company’s position in pay-TV in Britain, Ireland, Austria, Germany, and Italy. As of 2016, Sky already holds 21 million pay-TV subscribers and 30,000 employees. Further, the deal will reinforce Sky’s own position in entertainment and sport, boosting augment adjusted earnings and free cash flow.
FOXA’s stock has declined 15.1% in the past 6 months, outperforming the market’s 11.5%. During this period, shares of Lions Gate Entertainment Corp. (NASDAQ:$LGF), Eros International Plc (NASDAQ:$EROS), and World Wrestling Entertainment Inc (NASDAQ:$WWE) have all increased 16.6%, 28.5%, and 7.9% respectively.
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