Britain clears way for News Corp/BSkyB deal
The British government on Thursday cleared the way to approve News Corp's bid to win control of broadcaster BSkyB, after it offered to spin-off the Sky News operation to address competition concerns.business Updated: Mar 03, 2011 17:31 IST
The British government on Thursday cleared the way to approve News Corp's bid to win control of broadcaster BSkyB, after it offered to spin-off the Sky News operation to address competition concerns.
"The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has today announced that...he intends to accept undertakings from News Corporation on their proposed merger with BSkyB in lieu of a referral to the Competition Commission," the government said in a statement.
"The undertakings that News Corporation has offered would involve Sky News being 'spun-off' as an independent public limited company."
Hunt, who also launched a consultation over the deal today, will announce his final decision on March 21.
Rupert Murdoch's News Corp has offered to spin-off Sky News as a new company, with its shares distributed among existing BSkyB investors.
News Corp, which currently owns 39.1 per cent of BSkyB, would retain the same stake in the new company, which would have a board made up of a majority of independent directors.
News Corp had been waiting on Hunt's decision over whether to refer its 7.5 billion pounds bid for the 61 per cent of BSkyB shares it does not already own to the competition authorities.
"I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead," Hunt said in the statement.
"The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has."
Hunt delayed a decision on whether to refer the deal for a full competition inquiry in January after media regulator Ofcom suggested the move might be against the public interest in media plurality.
The minister had said the move would give News Corp more time to gather information to support its bid and allay his concerns.
News Corp, which also owns British newspapers including The Sun and The Times, first offered 700 pence a share in June, but this was rejected by BSkyB's directors who said they wanted more than 800 pence per share.
The companies behind the newspapers' competitors --including the Daily Mail, The Daily Telegraph, The Guardian and the Daily Mirror as well as broadcasters BBC and Channel 4 -- have all expressed concerns that a News Corp deal could threaten competition in the sector.