Business

Sky investor demands transparency over Fox bid

Sky offices in West London Image copyright AP

Another City shareholder has called on Sky's independent directors to explain why they have backed a takeover by Rupert Murdoch's 21st Century Fox.

Last Friday, the US media giant said it would offer £10.75 a share for the 61% share of Sky that it does not yet own.

The independent directors of both companies have reached a provisional agreement on this price.

But Richard Marwood of Royal London Asset Management has demanded more information.

"Those independent directors have taken advice, and we think that they should share that with shareholders, to actually allow the rest of us to see [if] £10.75 is the right price, so we are all acting from the same information," he told BBC Radio 4's Today programme.

As it is part of the FTSE 100, the shares in Sky that 21st Century Fox wants to buy are owned by dozens of City investment firms.

The shares were trading at 982p on Wednesday amid growing calls for any bid to be referred by the government to the media regulator, Ofcom.

Royal London is only the 68th largest investor in Sky with a stake of just 2.4 million shares, amounting to 0.14% of the total.

However, Royal London's comments add to a growing outcry from some shareholders that Sky's directors should explain their thinking and hold out for a higher price.

'Question marks'

Standard Life and Jupiter Asset Management have already questioned the supposed independence of the Sky board, pointing out that Rupert Murdoch's son James is both chairman of Sky and chief executive of Fox.

Chase Carey, a former chief executive of Fox Television and co-chief operating officer of Rupert Murdoch's newspaper group, News Corporation, is also on the Sky board.

Another non-executive director at Sky, John Nallen, is also the chief financial officer of 21st Century Fox.

Mr Marwood of Royal London said there were "a few question marks" about the corporate governance of Sky.

"We had concerns when he [James Murdoch] was appointed to be the chairman of Sky, just for this situation," he said.

"We felt if there were ever to be a bid, there would be a conflict, and our fears have been realised with what's happened."

Mr Marwood added: "To some extent, Sky have tried to allay the fears of investors by having these independent directors opining on the bid. But I think more transparency to give us some confidence that there is some independence there would be very good."

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