[07-11-11] In January 2011, News Corp<\/b>.\u2019s U.K. wing News International<\/b> proposed spinning off Sky News<\/b> into a separate publicly-traded company as a concession for its proposed acquisition of satellite TV company British Sky Broadcasting (BSkyB)<\/b> and an effort to avoid the involvement of the U.K. Competition Commission<\/b> in the buy-out process.<\/p>\n
Seven months later, the Rupert Murdoch-led company finds itself heavily entrenched in a phone-hacking scandal from some of its U.K. news outlets, which has forced News Corp. to take its bid in front of the same commission it tried to side-step. Analysts said the development could effectively delay News Corp\u2019s BSkyB acquisition until the first quarter of 2012 at the earliest.
\n \u201cIt\u2019s politically difficult for the final approval for the financial transaction to occur against a background of which the chairman of News International is connected with BSkyB and his name is Murdoch,\u201d Enders Analysis<\/b> Founder and CEO Claire Enders said in a statement. \u201cIt\u2019s really a question of the political climate. Britain\u2019s Competition Commission now must hold a full-scale inquiry into whether the takeover would break anti-monopoly laws. These inquiries usually take six months, but this could take longer. This is a scandal of seismic proportions and of immense political and financial impact on News Corp. \u2014 potentially extremely negative to the business as a whole.\u201d
\n James Murdoch has been overseeing News International since 2007 \u2014 the same year he became non-executive chairman at BSkyB after running the satellite television company for four years as CEO. Murdoch said July 9 that the U.K. publishing unit would shut down its News of the World tabloid after allegations that employees hacked into voicemails of murder victims and politicians became public.
\n In a July 11 report, Charles Stanley<\/b> Analyst Sam Hart said News Corp. would face harsh consequences from the scandal. \u201cNews Corp. shares have been dubbed \u2018politically toxic.\u2019 The BSkyB deal is all but dead.\u201d
\n Not all analysts\u2019 projections were as gloomy. Lazard Capital Markets Media Analyst Barton Crockett said that News Corp.\u2019s ability to execute the acquisition in the long-term shouldn\u2019t be affected. \u201cThe News Corp. phone-hack fiasco is the strangest bad news we\u2019ve ever seen hit a stock we covered. Despite this, we believe the scandal should have limited lasting impact, and we\u2019d buy any dip tied to it.\u201d
\n BGC Partners<\/b> Media Analyst Louise Cooper called Murdoch\u2019s push forward to move the BSkyB acquisition into the hands of the U.K. Competition Commission a \u201csmart move.\u201d
\n \u201cIt allows politicians some wiggle room, it takes all the political pressure off. [Murdoch] has done the government a favor by forcing a competition inquiry \u2014 a favor which the media mogul will hope to redeem in the future,\u201d Cooper said in a July 11 report. \u201cIt will take between 24 and 32 weeks for the Competition Commission, if it decides to review the bid, to issue its recommendations. That could give News Corp. time to contain the fallout tied to the hacking scandal.\u201d
\n Cooper added that despite BSkyB\u2019s shares also falling in the wake of the hacking scandal news, investors shouldn\u2019t worry. \u201cThis tells us that, en masse, the [investor community] thinks this deal is dead in the water for at least the foreseeable future. What is interesting is that we at BGC are starting to see some bottom fishing from institutions that think that even without a deal, BSkyB is looking good value,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"
[07-11-11] In January 2011, News Corp.\u2019s U.K. wing News International proposed spinning off Sky News into a separate publicly-traded company as a concession for its proposed acquisition of satellite TV company British Sky Broadcasting (BSkyB) and an effort to avoid the involvement of the U.K. Competition Commission in the buy-out process. Seven months later, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-84566","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/84566"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=84566"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/84566\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=84566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=84566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=84566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}