LONDON The decision by regulators that Twenty-First Century Fox (FOXA.O) would be a "fit and proper" owner of Sky SKYB.L will be challenged in court, campaign group Avaaz said on Wednesday.
In a potential new hurdle for the proposed $15.7 billion takeover of Sky, Avaaz said that a High Court judge had allowed the challenge to broadcast regulator Ofcom's ruling last June that a Fox-controlled Sky would be a 'fit and proper' owner of broadcast licenses in Britain.
Avaaz said the case would be heard before the end of June, potentially complicating an agreement to sell Sky to Fox and then on to Disney (DIS.N) if a separate sale of tycoon Rupert Murdoch's TV and film assets receives the green light.
The regulator said allegations of sexual and racial harassment at Fox News in the U.S. were extremely serious and disturbing, but had found no clear evidence to suggest senior executives at Fox were aware of the misconduct.
"We will defend our 'fit and proper' assessment, which was independent, expert and based on the evidence," an Ofcom spokesman said in a statement.
The deal already faces other obstacles. Last month Britain's competition regulator said that it should be blocked unless a way is found to prevent Murdoch, who owns the Times and the Sun newspapers, from influencing Sky's news output.
(Reporting by Alistair Smout; editing by Alexander Smith)