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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.

Neil Bennett: BSkyB will have to wait until new year to find out if bid was successful
Mr Mandelson was acting on the advice of the Director General of Fair Trading, who said the acquisition raised issues of competition over the TV rights to football.

There were also concerns of public interest which needed to be resolved.

[ image: BSkyB tycoon Rupert Murdoch has his sights set on winning control of Man Utd]
BSkyB tycoon Rupert Murdoch has his sights set on winning control of Man Utd
The BSkyB offer will now be subject to a full investigation by the MMC which will report its findings next March.

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.

Peter Mandelson, Secretary of State, DTI
"The Secretary of State for Trade and Industry had little option but to refer the bid because of the concern expressed by fans, the FA, Government ministers and even the Competition Commissioner of the European Union.

"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.

[ image: Trade and Industry Minister Peter Mandelson has referred the bid to the MMC]
Trade and Industry Minister Peter Mandelson has referred the bid to the MMC
"The decision to a make a reference does not in any way prejudge the question of whether or not the merger would be against the public interest. It is for the MMC to report on this after its investigation," it said in its statement.

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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