Post by LUHG on Jul 13, 2011 14:30:21 GMT
BSkyB bid dropped by Rupert Murdoch's media group after pressure from the public and parliament
Rupert Murdoch's media group News Corporation bowed to pressure from the public and parliament on Wednesday and withdrew its bid to take full control of pay-TV company BSkyB.
All three main political parties were poised to call on News Corp to abandon its offer in a vote in the House of Commons later on Wednesday.
The move leaves News Corp's key strategy for UK corporate growth in tatters. The proposed £8bn deal has been in train for more than a year, with the first offer tabled in June 2010.
It is the one of the biggest setbacks the 80-year-old media mogul has ever suffered and follows 10 days of revelations about the true scale of phone hacking at the News of the World, the paper Murdoch shut down last week.
The decision to abandon the deal is also a major blow to James Murdoch, who is third in command at the company and has responsibility for News Corp's UK businesses, including its Sky stake and News International.
It is likely to lead to criticism from investors over the way the company has handled the phone-hacking affair. James Murdoch initially took charge of the scandal but his father has twice flown in to the UK to oversee matters, most recently at the weekend.
News Corp's deputy chairman and chief operating officer, Chase Carey, said it had become clear that the Sky takeover "is too difficult to progress in this climate".
Carey, who is also News Corp's president, said: "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate.
"News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."
News Corp will have to pay BSkyB a break fee of around £38.5m after walking away from the deal.
BSkyB's share price immediately began to fall. It was down by 23.5p, or 3.4%, to 669p at about 2.30pm on Wednesday, shortly after the announcement that the deal was off, far below the 700p level at which News Corp originally tabled a bid.
More than £3bn has been wiped from the value of BSkyB shares since the Guardian revealed on Monday 4 July that News of the World journalists had hacked into a mobile phone belonging to murdered teenager Milly Dowler.
The decision to walk away from the deal was taken earlier on Wednesday before prime minister's questions, which was followed by an announcement by David Cameron about the details of two separate inquiries, one into phone hacking and the other into media standards.
Carey was at News International's Wapping offices on the fringes of the City of London briefly, where the decision is believed to have been finalised.
Nick Clegg, the deputy prime minister, said withdrawing the bid was the "decent and sensible" thing do to.
The Liberal Democrat leader briefly threatened to cause a coalition split when he declared Murdoch should abandon the Sky offer earlier this week, before Cameron decided he would also back a Labour motion to call for it to be dropped.
The shadow culture secretary, Ivan Lewis, said: "It's a victory for the public of this country, it's a victory for parliament and it's a victory for the tremendous leadership that Ed Miliband has shown
From www.guardian.co.uk/media/2011/jul/13/news-corp-pulls-out-of-bskyb-bid
I think this is very good news. Does anyone think that this isn't good news.
Rupert Murdoch's media group News Corporation bowed to pressure from the public and parliament on Wednesday and withdrew its bid to take full control of pay-TV company BSkyB.
All three main political parties were poised to call on News Corp to abandon its offer in a vote in the House of Commons later on Wednesday.
The move leaves News Corp's key strategy for UK corporate growth in tatters. The proposed £8bn deal has been in train for more than a year, with the first offer tabled in June 2010.
It is the one of the biggest setbacks the 80-year-old media mogul has ever suffered and follows 10 days of revelations about the true scale of phone hacking at the News of the World, the paper Murdoch shut down last week.
The decision to abandon the deal is also a major blow to James Murdoch, who is third in command at the company and has responsibility for News Corp's UK businesses, including its Sky stake and News International.
It is likely to lead to criticism from investors over the way the company has handled the phone-hacking affair. James Murdoch initially took charge of the scandal but his father has twice flown in to the UK to oversee matters, most recently at the weekend.
News Corp's deputy chairman and chief operating officer, Chase Carey, said it had become clear that the Sky takeover "is too difficult to progress in this climate".
Carey, who is also News Corp's president, said: "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate.
"News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."
News Corp will have to pay BSkyB a break fee of around £38.5m after walking away from the deal.
BSkyB's share price immediately began to fall. It was down by 23.5p, or 3.4%, to 669p at about 2.30pm on Wednesday, shortly after the announcement that the deal was off, far below the 700p level at which News Corp originally tabled a bid.
More than £3bn has been wiped from the value of BSkyB shares since the Guardian revealed on Monday 4 July that News of the World journalists had hacked into a mobile phone belonging to murdered teenager Milly Dowler.
The decision to walk away from the deal was taken earlier on Wednesday before prime minister's questions, which was followed by an announcement by David Cameron about the details of two separate inquiries, one into phone hacking and the other into media standards.
Carey was at News International's Wapping offices on the fringes of the City of London briefly, where the decision is believed to have been finalised.
Nick Clegg, the deputy prime minister, said withdrawing the bid was the "decent and sensible" thing do to.
The Liberal Democrat leader briefly threatened to cause a coalition split when he declared Murdoch should abandon the Sky offer earlier this week, before Cameron decided he would also back a Labour motion to call for it to be dropped.
The shadow culture secretary, Ivan Lewis, said: "It's a victory for the public of this country, it's a victory for parliament and it's a victory for the tremendous leadership that Ed Miliband has shown
From www.guardian.co.uk/media/2011/jul/13/news-corp-pulls-out-of-bskyb-bid
I think this is very good news. Does anyone think that this isn't good news.