brands under fire

News Corp. in Crisis: Murdoch Drops BSkyB Bid

Posted by Sheila Shayon on July 13, 2011 09:30 AM

When the British prime minister tells you your deal should die, Rupert Murdoch listens.

As News Corp.'s phone hacking scandal continues to dominate headlines around the world and unfold in the very public court of public opinion, the latest shoe to drop is Murdoch's BSkyB bid.

Following British PM David Cameron's call for the "disgraceful" News Corp. to drop its bid to acquire all of BSkyB, the company is doing just that. The move marks something of an about-face for Cameron, who has been criticized for not being tough enough on News Corp. before now.

The Guardian states on its phone-hacking scandal live-blog that “News Corporation ("News Corp") 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.”

After the company yesterday was stung by a parliamentary delay while the UK government reviews the deal, the heavy criticism in a parliamentary debate today has compelled Murdoch and his top lieutenants to announce it's pulling the bid altogether.

Chase Carey, Deputy Chairman, President and COO of News Corp. (and potential successor to Murdoch), commented: "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." 

Ivan Lewis, shadow culture secretary, commented to the BBC, “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.”

The BSkyB share price is dropping, as News Corp says they’ll keep their 39% stake in BSkyB, according to the BBC.

Labour leader Nick Clegg commented that withdrawing the bid was the "decent and sensible" thing do to.

More of today's News Corp. developments are detailed on the Guardian's blog.

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