Sky sinks as investors mull a future without Murdoch

 
Steve Dinneen
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SHARES IN BSkyB were rocked yesterday by the revelation News Corp will not be making a bid – at least not in the short term.

It closed down 4.6 per cent at 715p after earlier falling below 700p for the first time in almost a year.

One of BSkyB’s major shareholders yesterday said News Corp’s bid for the broadcaster is dead in the water. Crispin Odey, who has amassed more than 4m Sky shares in the last five days, told City A.M. it was “obvious” there is not going to be a bid for the company, following the spate of damning revelations surrounding News International and the political furore surrounding Murdoch’s under-fire media empire.

Odey – who now holds close to 2.7 per cent of the firm – maintained Sky’s stock is still a bargain. He added he is not buying in the hope of a rival bid but as a long-term investment. However, S&P Equity Research analyst Alex Wisch said he believes the bid will eventually complete – but added Murdoch could be forced to part company with the whole of News International to force the deal through.

He said: “This is obviously taking longer than anybody expected. I’m still surprised by the share price though as I believe it will eventually go through. Sky is everything to News Corp – it will be the trophy asset in the UK. Letting go of News International is a possibility if it makes this deal happen.”

Meanwhile News Corp came under increasing pressure in the US as a class-action lawsuit brought against it by shareholders was updated to include complaints about the phone hacking scandal. A group of shareholders led by Amalgamated Bank and Central Laborers Pension Fund say Murdoch allowed the culture of corruption to fester without properly addressing it. They also say in the legal papers, first filed to a court in Delaware in May, that Murdoch’s tendency to rely on his children for top jobs is detrimental to shareholder value.

The corruption accusations against the paper – which sold 4.5m copies of its final edition – continued to mount yesterday, with fresh claims that police guards sold royal contacts to the News of the World.