Rupert Murdoch's News Corp took a huge step towards securing its prized £8bn buyout of BSkyB when the government accepted proposals designed to alleviate competition concerns.
The move, which could still be challenged by media rivals in court, would allow News Corp to avoid a prolonged investigation and instead start negotiating the terms of the deal, its most important and politically charged in Britain for decades.
As BSkyB consistently posts strong results, analysts had said the price for the satellite pay-TV group would only increase and News Corp is under pressure to secure a deal as soon as possible.
In return for approval, News Corp will spin off the loss making but influential Sky News channel and guarantee its future by giving it a carriage-deal for the next ten years.
The shares in that company would be distributed amongst the existing shareholders of BSkyB in line with their shareholdings, with News Corp therefore retaining a 39.1 per cent stake holding.
To ensure editorial independence, the company would have a board made up of a majority of independent directors, including an independent chair.
News Corp wants to buy the 61 per cent of BSkyB it does not already own, raising concerns the company could gain too much control over the media and influence over public opinion.
News Corp, which also owns The Sun, Times and News of the World, had offered 700 pence per share for BSkyB but Sky's independent directors have demanded 800 pence as a minimum. The two companies agreed to secure regulatory approval first and then agree the terms.
City A.M. Reporter