BSkyB shares slump on doubts over deal

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BSkyB shares slump on doubts over deal

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BSkyB shares slumped further on Friday because of the phone hacking scandal involving Rupert Murdoch’s News Of The World tabloid newspaper.

The UK government has warned it will take “some time” to reach a decision on whether to allow Murdoch to take full control of the British pay-TV satellite broadcaster.

Murdoch has to have government permission to acquire the 61 percent stake in BSkyB he does not already own.

The Department for Media has examined News Corp’s planned takeover of BSkyB in terms of whether it will affect media plurality and the number of “media voices” present in Britain.

After the sudden closure of Britain’s biggest-selling Sunday newspaper due to its involvement a phone hacking scandal, the government warned that its final decision could “take some time” due to the number of responses submitted to a final consultation, all adding to an increasingly uncertain picture around the deal.

“The Secretary of State … will consider all relevant factors including whether the announcement regarding the News of the World’s closure has any impact on the question of media plurality,” it said in a statement.

The British government had always said that the phone hacking scandal and the BSkyB takeover were not linked from a legal standpoint but analysts, who had widely expected the deal to be approved, have started to turn more cautious.

“I don’t see how this deal can go ahead now,” said Panmure Gordon’s Alex DeGroote while warning the speed at which events are unfolding meant investors were “into totally uncharted territory”.