Rupert Murdoch’s News Corp. has withdrawn its bid to take over British satellite broadcaster BSkyB, following pressure from politicians, the media and the public in light of the News of the World phone hacking scandal.
The withdrawal of the bid is a setback for Murdoch as he targets digital communications and broadcast over newspapers.
News Corp. had been seeking to buy the 60.9% of the BSkyB shares it does not already own. The move would have created the largest media company in Britain.
The rest of the satellite broadcaster’s shareholders consist of pension holders, insurance firms and private shareholders, while Tesco and the Church of England also hold small stakes.
The company made the announcement it was withdrawing its bid just hours before parliament was set to vote on a symbolic measure condemning the planned takeover. Prime Minister David Cameron’s coalition government had planned to side with the opposition Labour party to vote against the deal.
The withdrawal will delay the bid for a few months, allowing News Corp time to get its house in order and fuelling rumours that part of its newspaper empire may be sold.
“It has become clear that it is too difficult to progress in this climate,” News Corp. deputy chairman Chase Carey said.
News Corp., based in New York, faces accusations that journalists at the News of the World Sunday newspaper hacked into the phones of murdered schoolgirl Milly Dowler and terror victims and paid police for stories. The allegations prompted Murdoch to close the 168-year-old News of the World tabloid on which his media operations in the UK were founded.
News International CEO, Rebekah Brooks, Rupert Murdoch and his son James may also appear before MPs next week over the phone-hacking scandal, according to the Culture Committee’s chairman.
The break down of the broadcasting deal could also accelerate Murdoch’s ambitions to expand his reach in digital media. News Corp recently launched The Daily, its iPad news app, under the slogan: “New times demand new journalism.”
The Daily was evidenced as proof of the seriousness with which Murdoch, regarded the iPad, a device he has said he regards as the future of media.
Speaking about the launch of The Daily, Murdoch was quoted in a conference call as saying: “I think we’re going to see, around the world, hundreds and hundreds of millions of these devices. There will be all sorts of things we can do with them. As they develop technologically, we’ve got to develop our methods of presentation of news.”
