Sky shares slip amid deal talks between 21st Century Fox and Disney

Shares in Sky took a tumble on Tuesday after it emerged that 21st Century Fox had discussed selling its stake in the broadcasting giant to Disney as part of a wider deal.

Sky was down just shy of 2% in morning trading on the London Stock Exchange, with Disney eyeing a possible swoop for Fox's movie assets and part of its TV assets.

However, talks have stalled because the two entertainment giants are at odds over how the deal should be priced.

Liberum analyst Ian Whittaker said: "The talks had been ongoing but there are no current talks.

"We still see a successful conclusion of the bid as the most likely conclusion, which means the shares offer significant upside; however, we understand this news will cause further uncertainty."

The move comes as Rupert Murdoch faces an uphill battle to push through an £11.7 billion deal to buy the 61% of Sky that Fox does not already own after Culture Secretary Karen Bradley referred the acquisition to Britain's competition watchdog for a six-month investigation.

Ms Bradley shifted Fox's proposed takeover of Sky to the Competition and Markets Authority (CMA) for a full inquiry earlier this year after a three-month probe by Ofcom.

While Ofcom raised concerns over media plurality, it found there was no reason to block the takeover bid on the grounds of broadcasting standards.

But the CMA confirmed its investigation would focus on both media plurality and broadcasting standards.

Mr Whittaker added: "Fox's willingness to consider including the Sky stake as part of the disposal assets is a signal that it feels less confident over gaining regulatory approval from the UK Government, with the news that regulator Ofcom had stated the Fox News Channel had breached broadcasting standards adding further fuel to the fire."