Rupert Murdoch’s media group News Corporation bowed to pressure from the public and parliament on Wednesday and withdrew its bid to take full control of pay-TV company BSkyB.
All three main political parties were poised to call on News Corp to abandon its offer in a vote in the House of Commons later on Wednesday.
The move leaves News Corp’s key strategy for UK corporate growth in tatters. The proposed £8bn deal has been in train for more than a year, with the first offer tabled in June 2010.
News Corporation does still own nearly forty percent of British Sky Broadcasting, however. The conglomerate should now be required to sell its remaining stake (which the Murdochs don’t want to do) so that BSkyB can be fully independent.
Oddly enough, shares of both News Corporation and BSkyB are up this morning following the behemoth’s announcement that the deal was off. It just goes to show how much the human mind fears uncertainty more than anything else.
Officials at the company said that the lawyer, Tom Crone, had been the lawyer chiefly responsible for clearing controversial stories published in The News of the World and another paper in the Murdoch stable, The Sun. His resignation made him the first senior executive of News International to quit in the scandal.
News International increasingly looks like a sinking ship. Will News Corporation sell it, or spin it off, as many investors are suggesting? Or will Rupert Murdoch hold on to his British papers, even if they’re threatening to drag down his entire conglomerate?