Divided: Rupert Murdoch's 21st Century Fox has reached an agreement to take over broadcaster Sky for £11.7billion.

Rupert Murdoch's 21st Century Fox has reached an agreement to take over broadcaster Sky for £11.7billion.

Culture Secretary Karen Bradley will have 10 days to decide whether to refer the deal to regulator Ofcom, who would then rule on whether Murdoch passes a 'fit and proper person test'.

The mogul made a controversial bid for the British broadcaster Sky five years ago but was forced to abandon a takeover at the height of the phone hacking scandal.

Labour demanded a review by regulators today, questioning whether Murdoch or his son James would pass the public interest test.

Deputy leader Tom Watson warned Theresa May standing up to the deal would be a 'big call' and urged her to stand on the side of the country, not the media tycoon.

The decision on whether to probe the deal will land on Ms Bradley's desk when the European Commission is notified of the merger. This has not yet happened.

Mrs May's spokeswoman declined to comment today, citing the 'quasi judicial' nature of the Government's role.

The Australian media tycoon's 21st Century Fox today announced it had agreed a price with the directors of the pay TV giant, who will now recommend the deal to shareholders.

Murdoch is said to want the deal done by the end of 2017.

Announcing its bid, 21st Century Fox said in a statement: 'The strategic rationale for this combination is clear.

Culture Secretary Karen Bradley, pictured in Downing Street on Tuesday, will have a 10 day window on whether to refer the deal to Ofcom

'It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.

'It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.'

Shadow culture secretary and Labour deputy leader Mr Watson said: 'This bid was abandoned in the wake of the phone-hacking scandal, and now it's back.

'The Secretary of State must refer the bid to Ofcom, to assess whether it would result in too much media power being concentrated in too few hands, and whether Rupert and James Murdoch are 'fit and proper persons' to run a broadcaster.'

Mr Watson said 21st Century Fox was trying to rush the deal through over the Christmas break with the minimum of scrutiny.

He said: 'When she stood on the steps of Downing Street this summer, the Prime Minister said to the people of this country that 'When we take the big calls, we'll think not of the powerful, but you'.

'This is a big call. The Government needs to decide whose side it's on.'

Labour deputy leader Tom Watson has demanded the deal be referred to regulators Ofcom immediately to rule whether Murdoch is a fit and proper person

New deal: The offer proposed by Fox is priced at £10.75 per share - and their second takeover attempt in five years

Under the £10.75-per-share offer on the table, chief executive Jeremy Darroch, 54, could receive £24.5million for the 2.2million shares he has rights to under his contract.

Chief operating officer Andrew Griffith, 44, could earn £13.7million from the 1.2million shares to which he has rights. Both totals are less tax and other deductions.

FOX BUYS SKY: WHAT HAPPENS NOW? Rupert Murdoch's 21st Century Fox has unveiled its swoop to buy Sky TV. Once notification of the merger goes to regulators in Brussels, the Culture Secretary will have 10 days to decide whether to refer the bid to Ofcom by issuing a public interest intervention notice (PIIN). The media regulator will then spend up to 40 days carrying out a public interest test on the proposed deal, including a review of whether the holder of the broadcast licence is a 'fit and proper person'. If it has concerns, Ms Bradley will have to ask Fox to address any issues, and decide whether to accept what they suggest. A rejected compromise would send the bid to the Competition and Markets Authority for full review, which could take up to six months. After their scrutiny, Ms Bradley will have 30 days to block, approve or approve the deal with conditions. The European Commission could also take a look at the deal on competition grounds. Assuming the deal passes again, it will eventually be put to a vote of Sky shareholders. Advertisement

A number of Sky shareholders, including Standard Life Investments and Jupiter Asset Management, have questioned the offer price since news of the bid broke last week.

But Martin Gilbert, deputy chairman of Sky, has moved to assuage their concerns.

'We, supported by our advisers, believe 21st Century Fox's offer ... will accelerate and de-risk the delivery of future value for all Sky shareholders.

'As a result, the Independent Committee unanimously agreed that we have a proposal that we can put to Sky shareholders and recommend.'

The deal values Sky at £18.5 billion.

MPs have urged the Prime Minister to block Rupert Murdoch's bid to buy Sky - in a move which would see him have control over a TV network spanning 22million homes.

In the Commons on Monday, shadow culture minister Kevin Brennan said Mrs May had to live up to her words in Downing Street when she took over from David Cameron and pledged to stand up for the vulnerable.

'This is a big decision and we need to know whose side the government is on,' he said.

Ex PM Gordon Brown has led demands for intervention, writing to Ms Bradley urging her to block the deal and to send it out for scrutiny.

Former Liberal Democrat business secretary Sir Vince Cable said: 'This deal may be acceptable to a majority of shareholders but that doesn't mean it is in the public interest.

'The minister should now call in the takeover and start the process of independent investigation into the impact on plurality and competition.

'The takeover would strengthen even further the grip of a major media owner on UK media.'

Pay day: Under the £10.75-per-share offer on the table, chief executive Jeremy Darroch, 54, (left) could receive £24.5million and Chief operating officer Andrew Griffith, 44, (right) could earn £13.7million

Former culture secretary John Whittingdale said he expected Ms Bradley would seek advice from Ofcom on the deal, as the Government did five years ago, and that it would be cleared again.

WHAT WILL MURDOCH AND FOX OWN? In 2013, following the closure of the News of the World, the media mogul split his businesses and Fox then acquired the Sky stake. The New York-based company now owns a 39 per cent stake in Sky. Sky has 22million customers across five countries - the UK, Ireland, Germany, Italy and Austria. It has annual revenues of more than £11billion and is Europe's leading investment of television content. The company has a programming budget of £4.9billion. It paid £4.2billion for the rights to show Premier League football for three years from the 2016/17 season. The company regularly shows Super Sunday - where up to three matches can be viewed from 12 noon to around 6pm. It also has a deal with HBO - a huge network in the US - to exclusively show a number of television series, including Game of Thrones. The fantasy drama is Sky's most popular show, pulling in more than five million viewers for each episode. Sky's revenues rose by seven per cent to nearly £12bn earlier this year. Advertisement

But he told the BBC: 'It was ultimately cleared by Ofcom.

'Since then there has been an increase in the number of providers of news.

'I would be surprised if they reached a different view this time'

Mr Murdoch controls 21st Century Fox, which already owns a 39.1 per cent stake in Sky.

The offer of around £10.75 per share – 36 per cent more than the closing price on Thursday night – values the broadcaster at £18.5 billion.

Sky revealed the tentative agreement to the stock market last week, prompting its share price to soar almost 27 per cent to just under £10.

Mr Murdoch's son, Fox chief executive James Murdoch, was named chairman of Sky earlier this year, fuelling speculation the US media company would make a bid.

The recent slump in Sky's share price due to strong competition from rivals such as Amazon and Netflix has also led to predictions Rupert Murdoch might try to pick up the remainder of the broadcaster on the cheap.

But the second attempt by the Murdoch dynasty to wrest control of Sky is likely to face fierce opposition from MPs, and will be scrutinised closely by regulators and ministers.

Mr Murdoch is already a dominant force in the media, owning The Sun and The Times in the UK.

Crucially, however, those newspapers are now part of an entirely separate business to 21st Century Fox.

Sky paid £4.2billion for the rights to show Premier League football for three years from the 2016/17 season

Dr Cable, who referred the original takeover bid to Ofcom in 2010, said last night the Government had a duty to vet big media takeovers to ensure they were in the public interest.

He said: 'The way Theresa May's Government deals with this is a test of their independence from the influence of large proprietors. The consultation that has been launched on the implementation of Leveson would suggest there is a tendency for some to bow to the power of media giants – this must not be the case.'

Mr Murdoch's original bid for Sky was abandoned in the summer of 2011 in the wake of widespread opposition from MPs of all parties.

They said sole ownership of the broadcaster combined with his newspaper interests would give Mr Murdoch too much power and influence.

The deal was also affected by fallout from the phone hacking scandal at Mr Murdoch's News of the World paper.

Mr Murdoch's News Corporation was split into two divisions in June 2013. The entertainment arm became 21st Century Fox, while the newspaper publishing arm in Britain became News UK.