News Corporation Takeover Bid For BSkyB
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The News Corporation takeover bid for BSkyB was a proposed takeover of
British Sky Broadcasting Sky UK Limited is a British broadcaster and telecommunications company that provides television and broadband Internet services, fixed line and mobile telephone services to consumers and businesses in the United Kingdom. It is a subsidiary of ...
(BSkyB) by
News Corporation News Corporation (abbreviated News Corp.), also variously known as News Corporation Limited, was an American multinational mass media corporation controlled by media mogul Rupert Murdoch and headquartered at 1211 Avenue of the Americas in New ...
, the media conglomerate of
Rupert Murdoch Keith Rupert Murdoch ( ; born 11 March 1931) is an Australian-born American business magnate. Through his company News Corp, he is the owner of hundreds of local, national, and international publishing outlets around the world, including ...
. The bid was launched in June 2010 but was withdrawn in July 2011 following the
News International phone hacking scandal The News International phone hacking scandal was a controversy involving the now-defunct ''News of the World'' and other British newspapers owned by Rupert Murdoch. Employees of the newspaper were accused of engaging in phone hacking, police b ...
. News Corporation already owned 39.1% of BSkyB and held onto its stake following the collapse of the takeover bid. The takeover was an essential part of News Corporation's business strategy, not least as it would have made possible integration with other entities such as
Sky Deutschland Sky Deutschland GmbH, branded as Sky, is a German media company that operates a direct broadcast satellite Pay TV platform in Germany, Austria and Switzerland (through Sky Switzerland). It provides a collection of basic and premium digital sub ...
and
Sky Italia Sky Italia S.r.l. is an Italian satellite television platform owned by the American media conglomerate Comcast. Sky Italia also broadcasts three national free-to-air television channels: TV8, Cielo and Sky TG24. As of 2018, following an ag ...
.Nils Pratley, ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'', 12 July 2011
News Corp needs all of BSkyB
/ref> ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'' went so far as to say that, "Without a full takeover of BSkyB, News Corp's global satellite strategy would look an unco-ordinated mess." The first key turning point in the planned takeover was the removal in December 2010 of regulatory approval from
Vince Cable Sir John Vincent Cable (born 9 May 1943) is a British politician who was Leader of the Liberal Democrats from 2017 to 2019. He was Member of Parliament (MP) for Twickenham from 1997 to 2015 and from 2017 to 2019. He also served in the Cabinet as ...
, who had told undercover reporters from ''
The Daily Telegraph ''The Daily Telegraph'', known online and elsewhere as ''The Telegraph'', is a national British daily broadsheet newspaper published in London by Telegraph Media Group and distributed across the United Kingdom and internationally. It was f ...
'' he had "declared war" on Murdoch. When these comments were made public, the final say on the deal went instead to
Jeremy Hunt Jeremy Richard Streynsham Hunt (born 1 November 1966) is a British politician who has served as Chancellor of the Exchequer since 14 October 2022. He previously served in the Cabinet as Secretary of State for Culture, Olympics, Media and Sport ...
. Cable's comments on this matter were not published by the ''Telegraph'' but were instead leaked to then BBC journalist
Robert Peston Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
, most likely (according to a later Telegraph investigation) by two former Telegraph employees who had moved to News International, a News Corporation subsidiary. Hunt was much more sympathetic to the takeover bid than Cable. The second turning point was the series of revelations in early July of the hacking of the phones of non-celebrity victims by the '' News of the World'', a tabloid newspaper published by News International. Details of the activities, especially regarding the paper's hacking into the voicemail of murder victim
Milly Dowler Milly is a feminine given name, sometimes used as a short form (hypocorism) of Mildred, Amelia, Emily, etc. It may refer to: People * Milly Alcock (born 2000), Australian actress * Milly Babalanda (born 1970), Ugandan politician * Milly Bern ...
, sparked widespread outrage against News Corporation. Attempts to defuse the scandal by closing the ''News of the World'' and publishing an apology by Murdoch both failed. In the face of a planned motion in the
House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. T ...
calling on News Corporation to abandon the bid, they acquiesced.


Offer

On 15 June 2010, BSkyB announced that it had rejected an offer from
News Corporation News Corporation (abbreviated News Corp.), also variously known as News Corporation Limited, was an American multinational mass media corporation controlled by media mogul Rupert Murdoch and headquartered at 1211 Avenue of the Americas in New ...
to take full control of the company. News Corp had offered 700p per share for the remaining 60.9% of shares that it did not own. BSkyB said that it would only consider offers of at least 800p per share.


Regulatory issues

Although the two companies had not agreed on a revised takeover proposal, News Corporation announced its intention to seek regulatory approval from the European Commission in November. The Commission unconditionally approved the proposal the following month. The proposal was also reviewed by the British government. On 4 November 2010
Business Secretary The secretary of state for business, energy and industrial strategy, is a secretary of state in the Government of the United Kingdom, with responsibility for the Department for Business, Energy and Industrial Strategy. The incumbent is a mem ...
Vince Cable Sir John Vincent Cable (born 9 May 1943) is a British politician who was Leader of the Liberal Democrats from 2017 to 2019. He was Member of Parliament (MP) for Twickenham from 1997 to 2015 and from 2017 to 2019. He also served in the Cabinet as ...
referred the takeover bid to Ofcom to consider issues of media plurality. In July 2011 it was reported that around this time News Corp's News International subsidiary had "bullied" the Liberal Democrats. ''
The Observer ''The Observer'' is a British newspaper published on Sundays. It is a sister paper to ''The Guardian'' and '' The Guardian Weekly'', whose parent company Guardian Media Group Limited acquired it in 1993. First published in 1791, it is the ...
'' said that "According to one account from a senior party figure, a cabinet minister was told that, if the government did not do as NI wanted, the Lib Dems would be 'done over' by the Murdoch papers." In late December 2010, undercover reporters from ''
The Daily Telegraph ''The Daily Telegraph'', known online and elsewhere as ''The Telegraph'', is a national British daily broadsheet newspaper published in London by Telegraph Media Group and distributed across the United Kingdom and internationally. It was f ...
'', posing as constituents, set up a meeting with Cable, in which he made some unguarded remarks about the coalition, including a description of the coalition's attempt at fast, widespread reforms (including the health service and local governments) as being a "kind of Maoist revolution". When his comments appeared in the press on 21 December, Cable stated, "Naturally I am embarrassed by these comments and I regret them", before reaffirming his commitment to the coalition government, stating that "I am proud of what it is achieving". In May 2011 the
Press Complaints Commission The Press Complaints Commission (PCC) was a voluntary regulatory body for British printed newspapers and magazines, consisting of representatives of the major publishers. The PCC closed on Monday 8 September 2014, and was replaced by the Inde ...
upheld a complaint regarding the ''Telegraphs use of subterfuge: "On this occasion, the commission was not convinced that the public interest was such as to justify proportionately this level of subterfuge." In an undisclosed part of the ''Telegraph'' transcript, Cable stated in reference to
Rupert Murdoch Keith Rupert Murdoch ( ; born 11 March 1931) is an Australian-born American business magnate. Through his company News Corp, he is the owner of hundreds of local, national, and international publishing outlets around the world, including ...
's News Corporation takeover bid for BSkyB, "I have declared war on Mr Murdoch and I think we are going to win." This was given to the
BBC #REDIRECT BBC #REDIRECT BBC Here i going to introduce about the best teacher of my life b BALAJI sir. He is the precious gift that I got befor 2yrs . How has helped and thought all the concept and made my success in the 10th board exam. ...
...
's
Robert Peston Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
by a whistleblower unhappy that the ''Telegraph'' had not published Cable's comments in full, and also published on 21 December. Following this revelation Cable had his responsibility for media affairs – including ruling on Murdoch's takeover plans – withdrawn from his role as business secretary that same day. In July 2011 a firm of private investigators hired by the ''Telegraph'' to track the source of the leak concluded "strong suspicion" that two former Telegraph employees who had moved to News International, one of them Will Lewis, had gained access to the transcript and audio files and leaked them to Peston. After the business secretary Vince Cable was stripped of his jurisdiction over the deal, the proposal was referred to
Jeremy Hunt Jeremy Richard Streynsham Hunt (born 1 November 1966) is a British politician who has served as Chancellor of the Exchequer since 14 October 2022. He previously served in the Cabinet as Secretary of State for Culture, Olympics, Media and Sport ...
, the
Secretary of State for culture, media and sport The secretary of state for digital, culture, media and sport, also referred to as the culture secretary, is a Secretary of State (United Kingdom), secretary of state in the Government of the United Kingdom, with overall responsibility for strateg ...
. Hunt initially elected not to refer to the deal to the
Competition Commission The Competition Commission was a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom. It was a competition regulator under t ...
, announcing on 3 March 2011 that he intended to accept a series of undertakings given by News Corporation, paving the way for the deal to be approved. The undertakings would have led to Sky News being severed from BSkyB. On 23 June it was reported that News Corp had reached an agreement with Ofcom to approve the takeover, on the basis of Sky News becoming a separate company. By early July, despite public opposition to the deal, "Government says its ready to give clearance to deal. Jeremy Hunt gives opponents one final week to raise objections. However, he has provisionally agreed to proposals that will see Sky News be spun off as an independent company to allay fears the deal would give Mr Murdoch's News Corporation too much control of the media. After the consultation ends on July 8, Mr Hunt is expected to wave the merger through once and for all. He is keen to give final confirmation by July 19 when the summer parliamentary recess begins." Several days later, with the
News of the World phone hacking scandal News is information about current events. This may be provided through many different media: word of mouth, printing, postal systems, broadcasting, electronic communication, or through the testimony of observers and witnesses to events. New ...
exploding, Ofcom intervened, saying that it has "a duty to be satisfied on an ongoing basis that the holder of a broadcasting licence is 'fit and proper'".


Bid withdrawn

It was in the wake of the
Milly Dowler Milly is a feminine given name, sometimes used as a short form (hypocorism) of Mildred, Amelia, Emily, etc. It may refer to: People * Milly Alcock (born 2000), Australian actress * Milly Babalanda (born 1970), Ugandan politician * Milly Bern ...
phone hacking allegations that a significant number of people, including former deputy prime minister
John Prescott John Leslie Prescott, Baron Prescott (born 31 May 1938) is a British politician who served as Deputy Prime Minister of the United Kingdom from 1997 to 2007 and as First Secretary of State from 2001 to 2007. A member of the Labour Party, he w ...
and other politicians, began to seriously question whether the takeover of BSkyB by News Corporation ought to be blocked. The
Media Standards Trust The Media Standards Trust is a British media think tank formed in 2006. It carries out research on issues in the media sector. It also advocates for press freedom as well as industry quality, transparency and accountability. It is a registered cha ...
formed the pressure group '' Hacked Off,'' to campaign for a public inquiry. Soon after launch, the campaign gained the support of suspected hacking victim, the actor
Hugh Grant Hugh John Mungo Grant (born 9 September 1960) is an English actor. He established himself early in his career as both a charming, and vulnerable romantic lead and has since transitioned into a dramatic character actor. Among his numerous a ...
, who became a public spokesperson, appearing on ''
Question Time A question time in a parliament occurs when members of the parliament ask questions of government ministers (including the prime minister), which they are obliged to answer. It usually occurs daily while parliament is sitting, though it can be ca ...
'' and ''
Newsnight ''Newsnight'' (or ''BBC Newsnight'') is BBC Two's news and current affairs programme, providing in-depth investigation and analysis of the stories behind the day's headlines. The programme is broadcast on weekdays at 22:30. and is also availa ...
.'' In July 2011, during the
News International phone hacking scandal The News International phone hacking scandal was a controversy involving the now-defunct ''News of the World'' and other British newspapers owned by Rupert Murdoch. Employees of the newspaper were accused of engaging in phone hacking, police b ...
, BSkyB shares plummeted and Hunt received well over 150,000 submissions from members of the public, driven by efforts by campaign groups
Avaaz.org Avaaz is a U.S.-based nonprofit organization launched in January 2007 that promotes global activism on issues such as climate change, human rights, animal rights, corruption, poverty, and conflict. In 2012, ''The Guardian'' referred to Avaaz as ...
and
38 Degrees 38 Degrees is a British not-for-profit political-activism organisation. It describes itself as " progressive" and claims to "campaign for fairness, defend rights, promote peace, preserve the planet and deepen democracy in the UK". 38 Degrees t ...
. Most submissions were opposed to News Corp taking full control of BSkyB. News Corp subsequently withdrew undertakings made as part of negotiations with the government, triggering an immediate referral of the proposal to the Competition Commission. Numerous analysts and commentators suggested that as a result of the phone hacking scandal, it would be politically difficult or impossible for News Corp to proceed with its takeover plans. In addition to public pressure for the deal to be withdrawn or for the Government to halt the proposal, Britain's major political parties all expressed the view that the deal should not go ahead. The Liberal Democrats and the
Conservatives Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
both indicated that they would support an opposition day motion from Labour calling on News Corp to rescind its offer. On 13 July, shortly before the
House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. T ...
was due to debate the motion, News Corporation announced that it would be withdrawing its proposal to take complete ownership of BSkyB. Chase Carey, the corporation's deputy chairman, stated that it was "too difficult to progress" with the proposed takeover given the phone hacking controversy. In a symbolic gesture, the House later passed the opposition day motion unanimously by
acclamation An acclamation is a form of election that does not use a ballot. It derives from the ancient Roman word ''acclamatio'', a kind of ritual greeting and expression of approval towards imperial officials in certain social contexts. Voting Voice vot ...
. In 2018 when
Comcast Corporation Comcast Corporation (formerly known as American Cable Systems and Comcast Holdings),Before the AT&T merger in 2001, the parent company was Comcast Holdings Corporation. Comcast Holdings Corporation now refers to a subsidiary of Comcast Corpora ...
has attempted to purchased Sky plc. Sky is now owned by Comcast today.


References

{{2011 News Corporation scandal News Corporation News International phone hacking scandal Attempted mergers and acquisitions 2010 mergers and acquisitions 2011 mergers and acquisitions Sky Group 2010 in British politics 2011 in British politics 2010 in British television 2011 in British television