Rupert Murdoch’s News Corporation has cleared a major hurdle after gaining approval from European regulators for its takeover of British DTH broadcaster BSkyB.
The media giant is looking to buy the 61% stake it does not already own in BSkyB for as much…
Rupert Murdoch’s News Corporation has cleared a major hurdle after gaining approval from European regulators for its takeover of British DTH broadcaster BSkyB.
The media giant is looking to buy the 61% stake it does not already own in BSkyB for as much as £7.8bn.
But News Corp still needs to pass the scrutiny test of UK industry regulator Ofcom, which is expected to decide by 31 December whether to refer the bid to the UK Competition Commission.
However, Murdoch’s chances of gaining final clearance for the acquisition seem to have unexpectedly increased following a gaffe by Lib Dem MP and Business Secretary Vince Cable.
Undercover reporters recorded Cable claiming his strong opposition to the deal. “I have declared war on Mr Murdoch and I think we’re going to win,” he was heard saying.
“He has a minority shareholding and he wants a majority – and a majority control would give him a massive stake. I have blocked it, using the powers that I have got. They are legal powers that I have got so I can’t politicise it. His whole empire is now under attack,” Cable added.
News Corp reacted saying it was “shocked and dismayed” by the comments and that they raised serious questions about “fairness and due process”.
Cable was subsequently stripped of responsibility for media regulation while keeping his post as Business Secretary. Culture Secretary Jeremy Hunt will now be in charge of media policy and competition.
Back in November, Cable had already stated that he would intervene in News Corp’s planned takeover of BSkyB. Following mounting pressure from rival media groups, including the BBC and a number of major national newspapers, Cable had stepped in on “public interest grounds” over media plurality and competition.
Murdoch’s move to buy a majority stake in BSkyB was first revealed in June when the DTH broadcaster board revealed that it had rebuffed an initial approach worth 700 pence per share, arguing the offer significantly undervalued the business. It later called for an offer in excess of 800p a share.
Despite this difference over BSkyB’s valuation, the two parties agreed to begin work on the regulatory process required for a tie-up. To that end, News Corp formally notified the European Commission on 3 November of its takeover bid.
News Corp currently owns two of the largest newspapers in the UK, The Times and
The Sun, and critics of the planned takeover argue that having full ownership of the country’s largest pay TV operator would give the media giant too much power.
The Conservative-led coalition government has since been split on its approach to the proposals, with Conservative ministers seen to be more relaxed over News Corp’s move than Cable and other Liberal Democrats. The opposition Labour party has also expressed concern over the deal.
