News Corp drops bid to take over BskyB as scandal worsens

In News Corp. news…

Rupert Murdoch’s beleaguered News Corp. has dropped its bid to buy the part of British Sky Broadcasting (BSkyB) it doesn’t already own, after U.K. lawmakers demanded the offer be scrapped because of a phone hacking scandal at its newspapers. “It has become clear that it is too difficult to progress in this climate,” said News Corp.’s Chief Operating Officer in an email Wednesday. He said News Corp. remains a committed long-term shareholder in BSkyB. The withdrawal of the $12.5-billion bid for the 61% of Britain’s largest pay-TV broadcaster is a blow to News Corp.’s strategy to bolster digital operations and benefit from BSkyB’s rising cash flow. News Corp., the owner of the Wall Street Journal and the Fox TV networks and film studios, will now turn its efforts to worsening allegations that journalists at the News of the World Sunday newspaper hacked into the phones of murdered schoolgirl Milly Dowler and terror victims and paid police for stories. Before sidelining the BSkyB deal, the allegations prompted Murdoch to close the 168-year-old tabloid on which his media operations in the U.K. were founded.

News Corp. (NWSA : NASDAQ : US$15.93), Net Change: 0.58, % Change: 3.78%, Volume: 147,230,027

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