LONDON (dpa-AFX) - Amid the furore in the British parliament, media tycoon Rupert Murdoch's News Corp. (NWS, NWSA) has Wednesday withdrawn its offer to acquire the remaining 60.1 percent stake in British Sky Broadcasting Group Plc (BSYBY.PK, BSY.L). The action comes in the wake of alleged phone hacking charges that triggered an outrage in Britain and led to the recent closure of the company's tabloid 'News of the World'.
'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,' said Chase Carey, Deputy Chairman, President and Chief Operating Officer of News Corp.
On June 15, News Corp., which currently holds a 39.1 percent stake in BskyB, made a 700 pence per share takeover bid for BSkyB, wishing to gain control over the remaining stake owned by other shareholders. The about 8.9 billion pounds bid for BskyB is touted to be News Corp's largest ever.
The UK government had decided to refer the proposed offer to the Competition Commission, but that is when the hacking scandal emerged. Murdoch has been under tremendous pressure in Britain over the hacking scandal, which has prompted wide-spread calls for News Corp. to drop its bid for satellite broadcaster giant BskyB.
Earlier in the day, British Prime Minister David Cameron also urged Murdoch to drop the bid and advised him to focus on 'cleaning up the mess created by a scandal over alleged illegal reporting practices at one of its U.K. newspapers.'
The scandal involves allegations that 'News of the World' illegally accessed mobile-phone voice mails to gain information about celebrities, politicians and crime victims, and was charged of unethical reporting tactics, which led to the closure of the tabloid.
Allegations have since emerged that News International, the British newspaper arm of News Corp., had illegally extracted private information about former British Prime Minister Gordon Brown and members of the Royal family.
Meanwhile, U.S. Senate Commerce Committee Chairman Jay Rockefeller on Tuesday called for a probe to find out whether the alleged hacking by News Corp. media companies in Britain had extended into the U.S. also.
He stressed that American authorities should confirm whether journalists working for the media conglomerate had violated any U.S. laws by targeting American citizens, including victims of the 9/11 terror attacks.
He urged authorities to look into any possible wrongdoing by the media giant, whose American assets include Fox News, The Wall Street Journal, the New York Post and Harper Collins publishers.
'The reported hacking by News Corporation newspapers against a range of individuals - including children - is offensive and a serious breach of journalistic ethics. This raises serious questions about whether the company has broken US law,' Rockefeller said.
In Wednesday's regular trading session, NWS is currently trading at $16.34, up $0.26 or 1.62 percent on a volume of 4.61 million shares. In the past 52-week period, the stock has been trading in a range of $13.46 to $19.08.
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© 2011 AFX News
