Rachel_Sandford
News Hound
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Following the phone hacking scandal which led to the closure of News of the World, Britain's largest selling newspaper and subsidiary of Rupert Murdoch's News Corporation, Chase Carey, deputy chairman and president of News Corp announced that the company, which was geared to take full ownership of BSkyB, has dropped their bid.
In a statement, Carey said: “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”
The announcement of the withdrawal came shortly before MPs debated a motion that was supported by all major parties. The motion was for Murdoch to scrap the bid entirely, and it was approved without a vote. Following the announcement, BSkyB's share price dropped by 4% for the day, but recovered 2%. Since peaking at 850p earlier in the month, its share price has fallen 20%, putting it at the trading level seen in June of last year, which was when News Corp first announced its bid. News Corp shares in New York, on the other hand, rose by 3.8%.
Also following the announcement, BSkyB chief executive Jeremy Darroch issued a statement saying “We remain very confident in the broadly based growth opportunity of BSkyB.”
Opinions
Members of media and government all have something to say about News Corp's withdrawal. Robert Peston, BBC business director, said “It's a huge humiliation. This was [News Corp's] biggest investment plan of the moment. It was one of the biggest investments they've ever wanted to make. It is an extraordinary reversal of corporate fortune...and questions will now be asked whether this is the full extent of the damage to the empire.”
As if in response to this, Liberal Democrat deputy leader Simon Hughes said “the sun is now setting on the Murdoch empire.”
Labour leader, Ed Miliband, chose not to focus on the condition of News Corp, rather on the people who rallied against it, saying the withdrawal was “a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility. People thought it was beyond belief that Mr. Murdoch could continue with his takeover after these revelations. It is these people who won this victory. They told Mr. Murdock 'This far and no further.'”
Prime Minister David Cameron, who last Friday announced details of a public inquiry into phone hacking and media regulation, himself said that “What has happened at this company is disgraceful—it's got to be addressed at every level. A Downing Street spokesman on behalf of Mr. Cameron also said: “We welcomed the news. As the prime minister has said, the business should focus on clearing up the mess and getting its own house in order.”
Public Inquiry
Cameron has appointed Lord Justice Leveson to oversee the public inquiry which will look into the News of the World scandal, specifically what went wrong in the initial police inquiry and the allegations of payments to police by the press. Lord Justice Leveson, the barrister that prosecuted Britain's worst serial killer, Rosemary West, will be assisted by a panel of senior independent figures.
Apart from investigating the phone hacking at News of the World, the committee will also look into the ethics and culture of the British media and review the regulations in the press. At the end of the investigation, the committee will be asked to make recommendations for how the press should be regulated in the future in a way that “supports their freedom, plurality and independence from government, but which also demands the highest ethical and professional standards.” said Cameron, who also said that those who sanctioned wrongdoing will no longer be allowed to have any role in running media companies in the UK. With regard to Rebekah Brooks, Cameron said “She was right to resign, that resignation should have been accepted. There needs to be root and branch change at this entire organization.”
The single inquiry, which replaces Cameron's idea of two separate investigations into the matter, will have powers to summon journalists, editors police, media proprietors, and politicians to give evidence under oath and in public. The PM told the Commons that the inquiry would begin as “quickly as possible.”
Seemingly in response to the criticism Cameron received for having met with Murdoch in Downing Street shortly after the election, he told MPs that he will make recommendations about the future conduct of relations between politicians and the press, which would require all ministers and civil servants to record meetings with senior editors and media executives. Cameron believes this will help make the UK government “one of the most open in the world.”
Ed Miliband agreed with the proposal, saying it should be imposed retrospectively, so that Cameron publish the details of his meetings with media executives, dating back to the last general election.
What's Ahead for News Corp
News Corporation continues to own 39% of BSkyB, though some speculate that following the public inquiry, it will be asked to give up this minority stake. The company also owns the Sun and the Times, and there is also speculation that Murdoch may consider selling these two newspapers.
“The question is, who is going to pay him the price that they are worth?” said Robert Peston. “He will not want to sell those papers at a loss.”
What is definite is that the BSkyB bid will not be resurrected. Business Secretary Vince Cable, who had been in charge of overseeing the bid but was replaced by Culture Secretary Jeremy Hunt because he “declared war” on Murdoch for recording him last year, said it would be “very difficult” for the corporation to try again.
The end of the public inquiry will determine the future of News Corporation. In the meantime, the actions being taken by the government have somewhat pacified the media and the public. Lord Prescott, former deputy prime minister relayed his own satisfaction by tweeting “BSykB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I'm happy.”
In a statement, Carey said: “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”
The announcement of the withdrawal came shortly before MPs debated a motion that was supported by all major parties. The motion was for Murdoch to scrap the bid entirely, and it was approved without a vote. Following the announcement, BSkyB's share price dropped by 4% for the day, but recovered 2%. Since peaking at 850p earlier in the month, its share price has fallen 20%, putting it at the trading level seen in June of last year, which was when News Corp first announced its bid. News Corp shares in New York, on the other hand, rose by 3.8%.
Also following the announcement, BSkyB chief executive Jeremy Darroch issued a statement saying “We remain very confident in the broadly based growth opportunity of BSkyB.”
Opinions
Members of media and government all have something to say about News Corp's withdrawal. Robert Peston, BBC business director, said “It's a huge humiliation. This was [News Corp's] biggest investment plan of the moment. It was one of the biggest investments they've ever wanted to make. It is an extraordinary reversal of corporate fortune...and questions will now be asked whether this is the full extent of the damage to the empire.”
As if in response to this, Liberal Democrat deputy leader Simon Hughes said “the sun is now setting on the Murdoch empire.”
Labour leader, Ed Miliband, chose not to focus on the condition of News Corp, rather on the people who rallied against it, saying the withdrawal was “a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility. People thought it was beyond belief that Mr. Murdoch could continue with his takeover after these revelations. It is these people who won this victory. They told Mr. Murdock 'This far and no further.'”
Prime Minister David Cameron, who last Friday announced details of a public inquiry into phone hacking and media regulation, himself said that “What has happened at this company is disgraceful—it's got to be addressed at every level. A Downing Street spokesman on behalf of Mr. Cameron also said: “We welcomed the news. As the prime minister has said, the business should focus on clearing up the mess and getting its own house in order.”
Public Inquiry
Cameron has appointed Lord Justice Leveson to oversee the public inquiry which will look into the News of the World scandal, specifically what went wrong in the initial police inquiry and the allegations of payments to police by the press. Lord Justice Leveson, the barrister that prosecuted Britain's worst serial killer, Rosemary West, will be assisted by a panel of senior independent figures.
Apart from investigating the phone hacking at News of the World, the committee will also look into the ethics and culture of the British media and review the regulations in the press. At the end of the investigation, the committee will be asked to make recommendations for how the press should be regulated in the future in a way that “supports their freedom, plurality and independence from government, but which also demands the highest ethical and professional standards.” said Cameron, who also said that those who sanctioned wrongdoing will no longer be allowed to have any role in running media companies in the UK. With regard to Rebekah Brooks, Cameron said “She was right to resign, that resignation should have been accepted. There needs to be root and branch change at this entire organization.”
The single inquiry, which replaces Cameron's idea of two separate investigations into the matter, will have powers to summon journalists, editors police, media proprietors, and politicians to give evidence under oath and in public. The PM told the Commons that the inquiry would begin as “quickly as possible.”
Seemingly in response to the criticism Cameron received for having met with Murdoch in Downing Street shortly after the election, he told MPs that he will make recommendations about the future conduct of relations between politicians and the press, which would require all ministers and civil servants to record meetings with senior editors and media executives. Cameron believes this will help make the UK government “one of the most open in the world.”
Ed Miliband agreed with the proposal, saying it should be imposed retrospectively, so that Cameron publish the details of his meetings with media executives, dating back to the last general election.
What's Ahead for News Corp
News Corporation continues to own 39% of BSkyB, though some speculate that following the public inquiry, it will be asked to give up this minority stake. The company also owns the Sun and the Times, and there is also speculation that Murdoch may consider selling these two newspapers.
“The question is, who is going to pay him the price that they are worth?” said Robert Peston. “He will not want to sell those papers at a loss.”
What is definite is that the BSkyB bid will not be resurrected. Business Secretary Vince Cable, who had been in charge of overseeing the bid but was replaced by Culture Secretary Jeremy Hunt because he “declared war” on Murdoch for recording him last year, said it would be “very difficult” for the corporation to try again.
The end of the public inquiry will determine the future of News Corporation. In the meantime, the actions being taken by the government have somewhat pacified the media and the public. Lord Prescott, former deputy prime minister relayed his own satisfaction by tweeting “BSykB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I'm happy.”
