Sceptics unconvinced as concerns remain about mogul's media dominance
Published 04/03/2011 | 05:00
RUPERT Murdoch took a huge step towards securing his prized €9.1bn buyout of satellite broadcaster BSkyB yesterday after the UK culture secretary Jeremy Hunt accepted News Corp's proposals to ease competition concerns.
The move will allow the company to avoid a prolonged investigation and start negotiating the terms of the deal -- its most important and politically charged in Britain for decades.
With BSkyB consistently adding new customers and selling more services, analysts said the acquisition price would rise and that Murdoch's proposal to spin off a chunk of his flagship Sky News channel showed his desire to conclude a quick deal.
"Murdoch has shown how much he wants to acquire the asset and how speedily he wants to do so," said Tim Daniels, media-sector strategist at Olivetree Securities.
"It seems he doesn't have much leverage to avoid paying shareholders top dollar."
News Corp made its initial offer of 700p per share for the pay-TV group last summer.
Sky's independent directors said they wanted more than 800p and analysts said on Thursday that the asking price should now be over 900p.
"The evidence that News Corp is in a hurry suggests that it may be willing to pay 900 to 1,000p to secure a deal quickly," said Citigroup media analyst Thomas Singlehurst.
The stock was trading at 821p as investors eyed a deal, although major shareholder Odey Asset Management said it was still reluctant to sell at any price.
The takeover battle has sparked a huge debate in Britain about the dominance of the Murdoch-owned media.
Many observers were not reassured by the ruling, which will see Mr Murdoch remain as the main funder and 40pc owner of the influential Sky News channel.
Analysts and lawyers said it would be hard to challenge the ruling, although it will raise questions over the government's conduct as Murdoch's papers backed the victorious Conservative Party at the last election.
Mr Murdoch, who owns a third of the British newspaper market, including the 'Sun' and 'The Times', has a reputation for interfering in the editorial stance of his companies and analysts have speculated that he waited until a Conservative government was in power before launching the offer.
An alliance of media groups opposed to the buyout dismissed Murdoch's solution to competition concerns as a "whitewash", while the Labour Party said it had concerns around the transparency of the process. (Reuters)