News Corporation drops bid for BSkyB, citing overwhelming public opposition

Vic­to­ry!

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.

Mean­while, the chief coun­sel for News Inter­na­tion­al (News Cor­po­ra­tion’s British sub­sidiary) announced that he is resign­ing from his post after twen­ty-six years:

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?