BSkyB’s Man Utd Takeover Is Blocked

Trade and industry secretary, Stephen Byers, has blocked BSkyB’s takeover bid for Manchester United Football Club. BSkyB offered £623 million for the club and it was expected that the deal would be allowed to go ahead, with certain conditions in place.

Over the last few weeks, since the Monopolies and Mergers Commission (MMC) handed its report on the takeover to the DTI (see MMC Submits Report On BSkyB Man Utd Bid To DTI), the satellite broadcaster has been lobbying the Department with assurances that the deal would not harm fair competition in the football and television marketplace (see BSkyB Assures DTI Over Man Utd Bid).

However, Stephen Byers has decided to concur with the MMC report which is understood to have been largely critical of the takeover. News of the block has has caused shares in BSkyB to begin falling, already down by 10p at 3:43 this afternoon. Manchester United’s stock had fallen by 27˝p at the same time today.

The DTI’s decision to block the takeover effectively puts a check on other media companies’ plans to buy out football clubs. It was expected that if the BSkyB/Man Utd deal were to be allowed, a number of other media groups and football clubs would follow suit (see Football Champions vs Media Giants Continues).

The main stumbling block for Sky has been in trying to assure the competition regulators that it would not have an unfair advantage in the negotiations for television broadcast rights. Byers said: “The MMC’s findings are based mainly on competition grounds where they concluded that the merger would adversely affect competition between broadcasters.

“I agree with the MMC that the advantages which ownership of Manchester United would give BSkyB over other broadcasters in future sales of Premier League broadcasting rights would substantially increase its chances of winning those rights… They also examined wider public interest issues concluding that the merger would damage the quality of British Football. I accept these findings,” he added.

Details on BSkyB’s reaction to the ruling will be available on Newsline as soon as possible.

Department Of Trade and Industry: 0171 215 5600 BSkyB: 0171 705 3000 Manchester United Commercial Department: 0161 872 3488