News Corp's BSkyB bid: Hunt delays referral decision

Culture secretary Jeremy Hunt minded to refer the takeover bid to the Competition Commission, but will first consider 'undertakings' from News Corp

Jeremy Hunt, the culture secretary, today confirmed he is taking more time to consider "undertakings" from News Corporation to allow its takeover bid for BSkyB to go ahead.

Hunt said that on the evidence provided by media regulator Ofcom, he considered the merger "may operate against the public interest in media plurality" and intended to refer it to the Competition Commission.

However, he added that before he does this he will consider undertakings by News Corp "which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference".

It is understood that News Corp's undertakings relate to editorial guarantees for Sky News.

"If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15 day consultation period during which time all interested parties will be able to express their views," Hunt said.

He added that he could not say how long this process would take. However, if Hunt decides to accept News Corp's undertakings and put the proposal out to a 15-day consultation, it could be a matter of weeks. If he goes ahead and refers the bid to the Competition Commission, it is likely to be about six months.

Hunt had planned to announce whether he was referring the bid to the Competition Commission by the end of the month.

"My main concern is not to work to an arbitrary timetable but to ensure that I reach my decision in a fair and even-handed way which is transparent and ensures that all concerns are properly considered," he said.

The culture secretary added that he would be asking Ofcom whether News Corp's ! undertak ings address the potential impact on media plurality.

Hunt said the Office of Fair Trading, under section 93 of the Enterprise Act 2002, would also be involved in deciding whether to accept News Corp's undertakings.

Hunt confirmed that he met News Corp executives on 6 January to inform them of the conclusions of Ofcom's report on the likely impact of the merger on UK media plurality and the course of action he intended to pursue.

The following day he sent News Corp and BSkyB copies of the Ofcom report, along with a letter explaining that he was minded to refer the bid to competition regulators but would accept written and oral representations from them "if they wanted to challenge my thinking".

On 10 January Hunt met with Ofcom to clarify aspects of its report. Sky and News Corp wrote to the culture secretary challenging elements of the Ofcom report on 13 and 14 January, respectively.

He met News Corp representatives again on 20 January "to hear representations on the issues they highlighted".

"As a result of these meetings and my consideration of the Ofcom report and subsequent submissions from the parties involved I still intend to refer the merger to the Competition Commission. On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality," Hunt said.

"However, before doing so it is right that I consider any undertakings in lieu offered by any merging party which have the potential to prevent or otherwise mitigate the potential threats to media plurality identified in the Ofcom report."


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