BREAKING NEWS: News Corporation has withdrawn its bid for UK satellite broadcaster BSkyB, after the recent phone hacking scandal by a newspaper owned by the corporation has put uncertainty over the acquisition.
“News Corporation announces that it no longer intends to make an offer for the entire issued and to be issued share capital of British Sky Broadcasting Group PLC (“BSkyB”) not already owned by it,” it said in a statement.
“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,” Deputy Chairman and President of News Corporation Chase Carey said in that statement.
The Rupert Murdoch-owned company has been pressured to pull its deal after The News of the World was caught up in a scandal over the use of phone hacking to gather stories, and more allegations have continued to emerge on not only The News of the World, but other newspapers in the UK. This has now sparked all over, with reports of a US Senator wanting an investigation after alleged phone hacking on 9/11 victims, and in Australia where News Limited is launching its own investigation.
The deal was heading to the Competition Commission to decide on its approval after reneging its deal on Sky News. However, the deal is already unpopular, and a scheduled debate and vote by the Labour opposition to condemn the move was already to be supported by the Conservative-led government. In addition, there is already plans for an inquiry over the role of the media – and looks like it will continue on despite the bid.
News Corporation already owns 39 percent of the company. A full buyout would allow News International, its UK subsidiary, a lot of money in a market where its newspapers not as profitable as they were.
More coming soon.