Thursday, October 29, 1998 Published at 11:37 GMT
Business: The Company File
Man Utd bid faces monopoly hurdle
The FA is worried about the impact on other clubs
Secretary of State for Trade and Industry, Peter Mandelson, has referred BSkyB's bid to take over Manchester United football club to the Monopolies and Mergers Commission.
There were also concerns of public interest which needed to be resolved.
The group of Manchester United shareholders and supporters who have fought against the proposed takeover of the club by BSkyB welcomed the news.
Professor Jonathan Michie, spokesman for Shareholders United Against Murdoch (SUAM) said he was delighted. "We have won the battle but we have not yet won the war and our campaign now moves on to persuading the Monopolies Commission that the intended takeover is against the interests of football, football fans and broadcasting.
"We are confident our campaign to block the sale will succeed."
The Football Association is alarmed that the planned deal would mean that BSkyB, which has the rights to live coverage of English soccer's premier league, would also own the biggest club.
However the Department of Trade and Industry was careful not to take sides over the deal.
Most analysts expect the government to clear the deal eventually, on the basis that major European media companies have been allowed to own football clubs on the continent without any serious impact on competition.
Mark Booth, chief executive of BSkyB, and Martin Edwards, chief executive of Manchester United, issued a joint statement saying: "We will put our case strongly to the MMC that the proposed transaction will not operate against the public interest and should be allowed to proceed.
"The boards of both companies firmly believe that the acquisition of Manchester United by BSkyB would be good for the club, the players and the fans and will bring together two companies whose skills complement each other and have demonstrated their commitment to football."
BSkyB bid £623m or 240p per share for Manchester United in September.
Earlier this week the BSkyB said it had received valid acceptances from shareholders representing 33.5% of the club's shares.
Combined with shares it had been buying directly from the company, the broadcaster had a total ownership just short of 45%.
However under UK takeover rules, BSkyB's bid will now automatically lapse.
If the DTI approves the deal next year, BSkyB will be free to renew its bid for the club.
Shares in BSkyB and Manchester United dropped as much as 3% after the DTI statement, but quickly recovered.
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