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Sky’s Rising Share Price Pressures Rupert Murdoch To Close BSkyB Deal

City analysts think News Corp could be forced to pay up to £10.2bn ($16.2bn) for the 61% of BSkyB it doesn’t own. Sky’s shares rose by 11% after announcing strong first-half results this morning. Pre-tax profits at BSkyB rose to £467m in the last six months of 2010, with revenues up 15% to £3.2bn. Rupert Murdoch has flown into London to personally oversee negotiations with the British government. City analysts predict that, with results as good as these, the longer the deal is delayed, the more BSkyB’s share price will rise – and the more News Corp will be forced to pay. Its offer of 700p per share, valuing the deal at £7.5bn, has already been rejected. News Corp is sitting on a £5.42 billion cash pile. The pressure will be on to close the deal before News Corp shareholders question whether the company can really afford it. RBS, the City investment bank, tells me it expects the Sky deal will go through before June. “News Corp wants the deal to close asap and will work with the regulator to achieve that,” says Paul Richards, director of equity research at Numis.

Murdoch’s arrival comes during a week when his News Corporation has become the news, rather than reporting on it. First, there’s UK culture secretary Jeremy Hunt giving the Murdochs more time to come up with ways to reduce News Corp’s media influence if he allows the deal to go through. … Read More »

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News Corp/BSkyB Deal Almost Certain To Be Approved, Say Analysts

City and media analysts agree that it’s almost certain News Corp will now get approval to buy the 61% of BSkyB it doesn’t own. The deal would cement Rupert Murdoch’s position as the most powerful media magnate in the world. Investec Securities, the investment bank, says it’s now 90% certain the deal will go ahead. Credit Suisse puts the likelihood even higher at 95%. BSkyB’s share price rose by 2% today in the wake of UK business secretary Vince Cable, the man who was supposed to have final veto over the deal, being stripped of his media powers. Brit TV and radio news bulletins have been about little else. Investment bank Nomura says Cable’s removal represents a “big step forward” for News Corp. Cable told 2 undercover reporters from the Daily Telegraph newspaper that he had “declared war” on Murdoch. Cable was supposed to be impartial when weighing evidence from media regulator Ofcom as to whether to refer the deal. News Corp’s bid will now be vetted by culture secretary Jeremy Hunt, a man known to be sympathetic to BSkyB. “It does seem to me that News Corp do control Sky already, so it isn’t clear to me that in terms of media plurality there is a substantive change,” Hunt said in June. Now that he’s got the quasi-judicial role, Hunt will want to be seen as impartial, media analyst Claire Enders tells me. “Jeremy will be at pains to … Read More »

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Murdoch BSkyB Probe Thrown Into Chaos

Jeremy Hunt, the UK culture secretary – and a man known to be sympathetic to the Murdoch media empire – will now decide whether News Corp’s £7.8 billion ($12.5 billion) takeover of BSkyB gets referred to the Competition Commission. Business secretary Vince Cable disqualified himself from the role this afternoon after telling 2 undercover newspaper reporters that he had “declared war on Mr Murdoch and I think we are going to win”. Prime minister David Cameron called Cable’s views on Rupert Murdoch “completely unacceptable”. The BBC has been leaked the full transcript of Cable’s secret taped conversation with the Daily Telegraph reporters. Ofcom is investigating the bid on the grounds of protecting a diversity of voices. It’s not meant to be political. Cable went on: “His whole empire is now under attack… So there are things like that we do in government, that we can’t do… all we can do in opposition is protest.” Robert Peston, the Beeb’s business editor, has been leaked the transcript by a whistleblower unhappy that the Daily Telegraph omitted this part of Cable’s interview in today’s front page splash. News Corp says: “News Corporation is shocked and dismayed by reports of Mr Cable’s comments. They raise serious questions about fairness and due process.” Claire Enders of Enders Analysis, the media analyst who wrote to Cable outlining how the deal would harm media diversity, tells me: “This was a huge mistake on his part. It … Read More »

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Brussels Postpones Murdoch/Sky Decision

News Corp has balked at selling off Sky News to satisfy Brussels. Despite that nose-thumbing, the European Commission has extended from December 8 to December 22 the deadline for the first phase of its competition investigation of Rupert Murdoch’s £12 billion ($19 billion) takeover of BSkyB. What Brussels is worried about is a 100% News Corp-owned BSkyB deal as the cornerstone of a global pay-TV empire. The European probe is separate from the investigation by British regulator Ofcom which will report on December 31 and still could derail the deal.

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James Murdoch Bares Teeth Over Sky Bid

James Murdoch has warned the UK government that News Corp could move overseas if the regulator blocks its £7.8 billion ($12.5 billion) bid for BSkyB. News Corp’s European and Asian boss made the veiled threat talking to investment bank analysts in Barcelona. The government must decide whether it wants to risk “jeopardising an £8 billion investment in the UK” with a prolonged investigation, Murdoch said, noting that News Corp could relocate some of its most innovative projects to more “welcoming” countries if the UK blocks its bid for BSkyB. “From India to Italy and to Germany, countries are becoming more welcoming of investment and more welcoming of what we can bring,” Murdoch said. Read More »

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Puttnam: Murdoch Takeover “Extremely Damaging To Informed Democratic Debate”

Speaking in the House of Lords, the UK equivalent of the Senate, David Puttnam said that News Corp’s bid to take control of BSkyB posed a threat to democracy. Here are excerpts from the speech given by the one-time Columbia Pictures boss:

My Lords… I had the honour of entering your Lordships House thirteen years ago tomorrow. Since that time there have been three or four really big issues with which I’ve consistently tried to engage – in part because they relate to experiences gained in my former life, but also because I believe they represent the type of issues upon which rests the future of the type of society most of us would wish to live in… My Lords, the purpose of this afternoon’s debate is to draw attention to the possibility that we are on the edge of a very slippery slope – one that could find us falling further and further under the influence of a single, US-based owner, with a highly questionable interest in the benefits of a diverse and flourishing plural media here in the United Kingdom. So why this debate, and why now?

The primary reason My Lords is that News Corporation yesterday notified the European Commission of its intention to purchase the 61% of BSkyB that it does not presently own. As I’ve already mentioned, this morning we heard the welcome news that this proposal had been referred by the Secretary of State, to Ofcom. It’s my most sincere hope that the Coalition’s proposed ‘trimming’ of Ofcom’s powers will not result in any diminution of its capacity to exercise those powers in respect of important matters such as this.

There, are of course, a number of aspects to media plurality – notably the Government’s proposals to repeal the local “cross-media” ownership laws, but this afternoon I only have time to focus on the really big issue resulting from News Corporation’s power, reach and influence. It’s my contention that if regulators and legislators in Europe and the UK remain supine, and simply wave this proposed acquisition through, the consequences for the citizens, as well as the political class in this country could become deeply troubling. The purchase of these shares would give News Corporation an unprecedented level of control over the UK media, one that to my mind has the potential to be extremely damaging, not just in respect of media plurality, but to informed democratic debate as a whole.

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Rupert Murdoch Blasts Anti-News Corp Alliance Opposed To BSkyB Bid

Rupert Murdoch took a swipe at rival media groups striving to block News Corp’s takeover of BSkyB and accused them of petty thinking. In what was billed as his first major speech in the UK since 1989, Murdoch tonight was the inaugural speaker of the Margaret Thatcher Lecture series at the UK’s conservative Center For Policy Studies in London. He said: “When the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. That’s an issue for my company … These are small thinkers who believe their job is to cut the cake up rather than make it bigger.” Murdoch was referring to bosses of some of Britain’s biggest media groups — including the BBC, the Daily Mail, the Telegraph and Channel 4 – who have written a joint letter to British business secretary Vince Cable calling for him to intervene. The government minister has the power to refer News Corp’s proposal to UK media regulator Ofcom (equivalent of America’s FCC), potentially derailing the £8 billion takeover. BSkyB is likely to notify Brussels officially of News Corp’s takeover intentions by the end of October. That starts the clock for the business secretary, who has to make a decision on whether to intervene within 2 weeks after that. 

In what at times was a self-effacing speech – at one point he referred to himself as a “parvenu” – Murdoch paid tribute to the former British prime minister and her legacy. Murdoch also … Read More »

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