British Sky Broadcasting, the satellite operator in which Mr Rupert Murdoch's News Corporation has a 40 per cent stake, will today announce a £625 million agreed deal to buy Manchester United football club.
United's board has unanimously accepted the offer despite protests from politicians and fans. The price is higher than expected and was agreed after the board held out during 36 hours of meetings for a better deal.
The takeover will have to be approved by the British government although BSkyB is confident that its purchase does not breach competition rules.
On Monday, Mr Peter Mandelson, Britain's Trade and Industry Secretary, confirmed that the Office of Fair Trading would scrutinise any takeover before advising him whether it needed to be referred to the Monopolies and Mergers Commission.
BSkyB owns exclusive rights to live Premier League football and politicians are concerned that ownership of the league's top club would leave the broadcaster in an unhealthily dominant position within the sport.
BSkyB is paying for the acquisition in an equal combination of cash and shares. United's management is expected to remain in place but it is not known whether Mr Martin Edwards, chief executive, will have a seat on the BSkyB board.
The broadcaster is expected to defend the acquisition as a good deal for football and for the club. United is understood to have accepted BSkyB's arguments that being part of a larger group will allow it to compete more effectively.
Following today's announcement, BSkyB will campaign to win round fans who have attacked the company's motives in bidding for the club. The company will seek to allay fears about big increases in ticket prices and the prospect of United's games only being available on a pay-per-view basis. It will stress continuity and say it has no desire to interfere with the club's day-to-day management.
The bid will have to be approved by the club's shareholders. About 60 per cent of the shares are owned by City institutions, with the remainder split between management and individual shareholders, who are mostly fans. Mr Edwards, whose father bought the club in the early 1960s, is the largest single shareholder with 14 per cent.
PA reports: Ms Gillian Howarth, secretary of the Independent Manchester United Supporters' Association, said she was disappointed. "With that sum of money I suppose it was inevitable they would accept but it proves that they don't listen to the backbone of the club - to the match-going supporters who don't want the deal," she said.
Speaking before the deal was finalised, the Manchester United manager, Mr Alex Ferguson, told the Sun: "Sky TV has been good for football." He said: "I think Sky has done a fantastic job. Whereas in the 1960s Albert Finney, Richard Burton and Tom Courtenay were the stars, they've now been replaced as idols by the footballers." News of the deal came amid reports that Mr Murdoch's News Corporation was involved in a £437.5 million deal in the US.