News Corp in BSkyB buy­out

Townsville Bulletin - - Investor -

CON­TROL: The UK gov­ern­ment has ap­proved News Corp plans to buy BSkyB RU­PERT Mur­doch’s global me­dia em­pire is poised to grow ever big­ger af­ter the Bri­tish gov­ern­ment ap­proved plans by News Corp to buy full con­trol of satel­lite TV op­er­a­tor Bri­tish Sky Broad­cast­ing Group PLC.

I n a c o n t r o v e r s i a l mo v e , t h e Con­ser­va­tive-led coali­tion said it will give News Corp the green light to buy the re­main­ing 61 per cent of BSkyB it does not al­ready own – on the con­di­tion that it spin off its Sky news chan­nel as an in­de­pen­dent com­pany.

The rul­ing, which is sub­ject to in­dus­try con­sul­ta­tion and po­ten­tial legal chal­lenges, was at­tacked by a coali­tion of other ma­jor me­dia out­lets and the op­po­si­tion Labour Party.

News Corp made the con­ces­sion to hive off Sky to avoid a pro­longed in­ves­ti­ga­tion by competition reg­u­la­tors into the pro­posed £ 12.3 bil­lion ($ 19.76 bil­lion) deal, one of its most po­lit­i­cally charged takeovers in years.

Op­po­nents are con­cerned that the com­pany will have too strong a voice in the Bri­tish me­dia in­dus­try.

Cul­ture Sec­re­tary Jeremy Hunt said he was ‘‘ very aware’’ of the con­tro­versy sur­round­ing the deal, but the com­pany had ad­dressed con­cerns about me­dia plu­ral­ity should the takeover go ahead.

‘‘ The un­der­tak­ings of­fered would en­sure that share­hold­ings in Sky News would re­main un­changed, and in­deed of­fer it more in­de­pen­dence from News Corp than it cur­rently has,’’ Mr Hunt said.‘‘ Noth­ing is more pre­cious to me than the free and in­de­pen­dent press for which this coun­try is fa­mous the world over.’’

In re­turn for gov­ern­ment ap­proval, News Corp will spin off the loss­mak­ing but in­flu­en­tial Sky News, re­tain­ing a 39.1 per cent stake in the news chan­nel, the same as its cur­rent stake in BSkyB.

It will not be able to in­crease that share­hold­ing for 10 years with­out gov­ern­ment per­mis­sion.

To en­sure the chan­nel’s sur­vival, News Corp will fund Sky for 10 years and agree to a seven-year li­cens­ing agree­ment for it to use the Sky News name.

Me­dia watch­dog Of­com, which had sub­mit­ted a crit­i­cal re­port on News Corp’s orig­i­nal takeover plans, said it sup­ported the new pro­pos­als, not­ing that the com­pany had agreed to ‘‘ place editorial in­de­pen­dence and in­tegrity at the heart’’ of the spun-off Sky News.

Aside from the con­sul­ta­tion hur­dle, the pro­posed deal hinges on share­holder ap­proval.

News Corp has yet to agree on a takeover price with BSkyB af­ter its ini­tial £ 12.3 bil­lion ($ 19.76 bil­lion), or 700 pence per share, bid was re­jected as too low.

The two com­pa­nies agreed to post­pone set­ting a price un­til the reg­u­la­tory hur­dles had been over­come.

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