OCH’S bid for BSkyB was hanging in the balance last night, despite his bombshell decision to close the flagship News of the World.
A Sky director told City A.M. the two sides are “miles away from any decision on price” because the situation “is changing so quickly”.
Culture Minister Jeremy Hunt has been forced to now delay his decision on whether to green-light the bid after receiving an unprecedented 100,000 submissions during a consultation period that was widely expected to be a formality. A decision is now not expected until September, although it is understood Hunt is still minded to accept the proposals, which include Sky News being “hived off” under an independent board of directors.
News Corp rallied during trading before closing marginally down, following a 3.5 per cent plunge a day earlier. But investors continue to worry about the Sky bid, with the broadcaster’s shares falling almost two per cent for the second day running.
S&P Equity Research analyst Alex Wisch told City A.M. he expects the bid to eventually go ahead. He said: “The decision to close the News of the World will appease the political establishment. It is less likely to look at the bid with regulatory eyes. I now expect News Corp to raise its offer to 830p.”
He added: “Sky is the most important thing. It is bigger than the News of the World. This is the thing that matters most. Everything else is secondary.”
Murdoch’s decision to stick by News International boss Rebekah Brooks (pictured) is also proving very controversial.