Murdoch drops bid for BSkyB

Rupert Murdoch has withdrawn his bid to buy the remaining equity in satellite broadcaster BSkyB after intense pressure from parliament.

The government yesterday backed a Labour motion calling on News Corp to withdraw the bid to buy the remaining 61 per cent of BSkyB after a police investigation into phone hacking culminated in arrests and the closure of the News of the World.

News Corp deputy chairman Chase Carey said in a statement that the deal was now “too difficult to progress”.

"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,” he said.

“News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."

Murdoch’s £7.8bn takeover of the BSkyB equity he does not currently control had already hit the buffers, leading to a sell-off in shares of both it and News Corp.

The government referred the bid to the Competition Commission, effectively delaying it by up to a year for investigation – but opposition in parliament led to additional pressure on Murdoch.

The withdrawal of the bid is a setback for Murdoch as he targets digital communications and broadcast over newspapers.