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Murdoch fights to save BSkyB deal amid hacking row

By Agence France-Presse
Monday, July 11, 2011 7:07 EDT
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Media baron Rupert Murdoch fought to keep his bid for satellite broadcaster BSkyB alive on Monday, with the British government consulting watchdogs amid calls for their decision to be shelved.

Murdoch has flown into London to take personal charge of the phone-hacking scandal that caused the demise of the 168-year-old News of the World tabloid as calls mounted for the government to block his media empire’s BSkyB bid.

One of Murdoch’s lieutentants, former News of the World editor Rebekah Brooks, is set to be interviewed by police as a witness, according to reports.

Culture Secretary Jeremy Hunt is writing to Ofcom, which regulates the telecommunications industry, and the Office of Fair Trading, seeking opinions on whether the matter could be referred to the Competition Commission in light of the scandal.

The government is to decide on whether Murdoch’s News Corporation should take full control of the broadcaster. News Corp. aims to take full control of the broadcaster by acquiring 61 percent of BSkyB that it does not already own.

The deal originally looked set to go through in the coming days, but it now risks being delayed for several months at least amid the furore.

BSkyB shares plunged more than 7.0 percent at the start of trading Monday, slumping to 694.47 pence shortly after the start of trade from 750 pence at the close on Friday, a drop of 7.4 percent. It later recovered slightly to 699 pence.

That means the share price has fallen below the 700-pence a share offered by Murdoch’s News Corp. Should the government decide to wave through the deal, BSkyB still needs to agree on a price.

The broadcaster, which has a portfolio including live English Premier League football and blockbuster films, is holding out for more than the £7.8 billion ($12.5 billion, 8.6 billion euros) offered by News Corp. last year.

Hunt was expected to ask Ofcom to clarify if the decision to close the News of the World gives additional reasons for concern over media plurality.

He will also ask if the alleged events at the tabloid have any impact on the credibility and undertakings offered by News Corp. as part of its BSkyB offer.

Ed Miliband, leader of the opposition Labour Party, was to stage a press conference, having led calls Sunday for the decision to be frozen until a police probe is over and threatened to force a vote in parliament on the issue.

The idea that News Corp. “should be allowed to take over BSkyB, to get that 100 percent stake, without the criminal investigation having been completed… frankly that just won’t wash with the public,” he told BBC television.

The News of the World had been dogged by allegations of voicemail hacking for years. Claims last week that murdered schoolgirl Milly Dowler and the families of dead soldiers were targeted turned the row into a national scandal.

Britain’s biggest-selling weekly newspaper was closed down, publishing its final edition on Sunday with the headline “Thank You & Goodbye”.

Dowler’s parents were meeting Deputy Prime Minister Nick Clegg in London on Monday and were due to hold a press conference of their own afterwards.

They are suing the News of the World over claims that their daughter’s voicemail was hacked into when she went missing in 2002.

Pressure mounted as The Daily Telegraph and The Guardian newspapers, and the BBC, said a 2007 internal report of News International (NI) — News Corp.’s British newspaper publisher — revealed “smoking gun” e-mails which showed the full extent of the paper’s use of hacking.

This contradicted claims made at the time that the practice was limited to a “rogue reporter”.

NI passed on e-mails detailing the report’s findings to police last month.

Murdoch backed Brooks, the under-fire NI chief executive, as the pair left his home following crisis talks on Sunday.

Police on Friday arrested Andy Coulson, another former News of the World editor and who was also Prime Minister David Cameron’s media chief until he quit in January, over the phone hacking allegations and claims of corruption.

Agence France-Presse
Agence France-Presse
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