News Corp./Sky Bid Referred to Competition Commission

LONDON: U.K. Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has referred News Corporation’s proposal to take full control of BSkyB to the Competition Commission, after the company withdrew its offer to spin-off Sky News.

"News Corporation is ready to engage with the Competition Commission on substance," the company said in announcing that it was withdrawing the proposed undertakings to secure approval for the deal. "News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the U.K."

Announcing the referral to the Competition Commission, Secretary Hunt stated: "Today’s announcement will be an outcome that I am sure the whole house will welcome. It will mean that the Competition Commission will be able to give further full and exhaustive consideration of this merger taking into account all relevant recent developments." 

The move delays the proposed merger for six to eight months.

Meanwhile, BSkyB’s share price continued to slip today as Deputy Prime Minister Nick Clegg called on News Corporation to abandon its efforts to take full control of the satellite platform. Clegg said that the company should "do the decent and sensible thing" given the outpouring of opposition to the merger since allegations were made that News Corp.-owned tabloid News of the World hacked into the voice mail of 13-year-old murder victim Milly Dowler in 2002. "I would simply say to him, look how people feel about this."

BSkyB’s share price, which closed at 750 pence on Friday, was down 4.6 percent today to close at 715.50 pence.