UK backs Murdoch's BSkyB bid after Sky News spin-off
Published 04/03/2011 | 05:00
THE Rupert Murdoch-owned News Corp has been given the green light to launch a bid for the broadcaster BSkyB after UK Culture Secretary Jeremy Hunt approved plans from News Corp to spin off Sky News.
News Corp, which currently holds 39pc of the parent of the Sky TV channels, has been trying to buy the remainder of BSkyB since making a £7.8bn (€9.1bn) bid last summer.
Those plans have met stiff opposition amid concerns over the scale of Mr Murdoch's interests in the British media and the possible infringement of Sky News's editorial independence.
Those concerns appear to have been allayed though after Mr Hunt approved plans to hive off the news channel into a new independent company, Newsco, with News Corp retaining a 39.1pc stake.
To ensure editorial independence the company would have a board made up of a majority of independent directors, Mr Hunt said in a statement.
This will included an independent chairman, and a corporate governance and editorial committee made up of directors, who would have no other News Corp interests.
News Corporation will not be allowed to increase its shareholding in the new company without permission from the Secretary of State for 10 years. It will also license the Sky News brand to the operation for seven years, providing an incentive to renew a second funding deal.
Mr Hunt said: "I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead."
The decision follows weeks of negotiations between News Corp and regulators Ofcom and the Office of Fair Trading.
Since News Corp's £7.8bn bid for the shares last June, rival media groups have raised concerns that the merger would give Mr Murdoch too much influence over public opinion.
Business secretary Vince Cable was stripped of his deciding role in the process after being taped saying he had "declared war" on Mr Murdoch before Christmas.
Mr Hunt said he had been "very aware" of the potential controversy surrounding the merger throughout the decision-making process. (additional reporting by the Daily Telegraph)