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Murdoch BSkyB takeover moves closer

Rupert Murdoch's controversial bid to take full control of BSkyB received a boost when the Government backed proposals to spin off Sky News as part of any deal.

Culture Secretary Jeremy Hunt said he was minded to wave through the takeover by News Corporation after the media giant offered to make the channel into a separate independent company and subsidise it for a decade, but opponents branded the undertakings a "whitewash" and Labour accused the coalition of a "cavalier" approach to the issues.

News Corp is seeking to avoid a full-blown inquiry into its plans to buy the 61% of BSkyB it does not already own after Mr Hunt said last month he planned to refer the deal to the Competition Commission.

The new conditions are subject to a 15-day public consultation period, but an alliance of other media organisations has already indicated it is ready to take legal action to block the arrangement.

News Corp has yet to agree a takeover price with BSkyB after its initial 700p-a-share bid, which valued the business at £12.3 billion, was rejected for being too low.

The two sides agreed to postpone setting a price until the regulatory hurdles have been overcome, but reports suggest the price Mr Murdoch is willing to pay is likely to be much lower than the 900p a share many BSkyB investors are expecting.

Mr Hunt, who took his decision following advice from regulators, said he was "very aware" of the controversy surrounding the deal but the remedies would address concerns about media plurality, should the takeover go ahead.

He told MPs: "Because I am very, very conscious that people are suspicious of the motives of politicians on a decision like this, I sought independent advice at every step of the way. Ofcom assure me that the undertakings that are being made do address the concerns that they had over plurality. I think News Corporation have moved a very long way. They are relinquishing significant control over the operation of Sky News."

An Ofcom spokesman said it was pleased News Corp had agreed to "place editorial independence and integrity at the heart" of the spun-off Sky News and "underpin this with arrangements that secure full independent governance".

News Corp, which also owns papers including The Sun and The Times, is offering to hive off Sky News into a company controlled by independent directors and with an independent editorial board. It would fund the news channel for 10 years and agree a seven-year licensing agreement for it to use the Sky News name.


From Belfast Telegraph