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News Corp. cancels BSkyB bid


News Corp. cancels BSkyB bid

Adam Russett July 13, 2011

News Corp., the corporation that has become embroiled in controversy due to the illicit tactics used by journalists who worked at papers such as The Sun and The News of the World (the latter of which was closed following a phone hacking scandal), recently conceded more ground. As of today, the corporation decided to pull out of its plans to purchase the pay-TV company, BSkyB. 

This may have been a preemptive move to stop the debate about the subject, which would have taken an official tone later today in England's House of Commons, where all three primary political parties were expected to call for a similar action, according to The Guardian. The announcement soon followed Prime Minister David Cameron's decision to launch two inquiries – one into the phone hacking scandal and another into media standards in general.

"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," said News Corp.'s chief operating officer, Chase Carey, the news source reports.

The owner of News Corp., Rupert Murdoch, is sure to be reeling after the blow. Murdoch had spent more than a year trying to move the pieces in the BSkyB buy and in less than a month, the prospects for the purchase suddenly became dismal.

Labour leader Ed Miliband said that the cancellation of the bid was "a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal," according to Reuters.

"Nobody should exercise power in this country without responsibility," he said.

BSkyB is being paid a hefty £38.5m due to the pull-out, but that hasn't quite buoyed the company's shares after traders reacted to the news that the deal had been cancelled.