Britain has accepted News Corps proposal to sell off the Sky News channel in order to alleviate competition concerns and clear the way for a $14 billion buyout of the satellite payTV group BSkyB.
Per yesterday’s NYT story breaking the news:
By spinning off Sky News, the News Corporation is hoping to finally secure approval for its effort to buy the roughly 61 per cent of BSkyB it does not own. The American media conglomerate first proposed taking over BSkyB last summer for about £7.8 billion ($12.7 billion).
Today the British government approved the plan, which will “allow News Corp to avoid a prolonged investigation and start negotiating the terms of the deal.”
That doesn’t mean it is necessarily smooth sailing from here on out — rivals could still challenge the plan in court:
As BSkyB consistently posts strong results, analysts have said the price for the satellite pay-TV group will only increase and News Corp was under pressure to secure a deal as soon as possible.
However, the government’s decision Thursday is likely to draw heavy criticism and raise questions about its relationship with Murdoch’s powerful media empire.
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.
To ensure editorial independence, the company would have a board made up of a majority of independent directors, including an independent chair.
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