News Corp withdraws Sky News spin off offer

News Corp has withdrawn its offer to spin off Sky News as part of its BSkyB takeover bid, made to avoid a referral to the Compettion Commission, a move that came as the government confirmed it would pass the deal to the competition regulator for further investigation.

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The Rupert Murdoch-owned media organisation says it is “withdrawing its proposed undertakings”, that were to address concerns about News Corp becoming too powerful in the media marketplace, “in lieu of reference to the Competition Commission”.

Culture secretary Jeremy Hunt confirmed this afternoon (11 July) he will refer the BSkyB bid to the Competition Commission with immediate effect and said the whole House [of Commons] will “welcome this development”.

The Competition Commission will now give further “full and exhaustive” consideration of hte merger, taking into account the recent developments at the News of the World and BSkyB’s withdrawal of its proposal to hive off Sky News.

Hunt wrote to media regulators Ofcom and the Office of Fair Trading earlier today over concerns that the News Corp may not remain a “fit and proper” media owner, following the hacking scandal that closed News of the World.

He asked the media regulators whether the alleged hacking at the News of the World could affect the proposed deal and whether they believe the bid should be referred to the Competition Commission.

In response, a News Corp statement says: “Should the Secretary of State for Culture, Olympics, Media and Sport decide on this basis to refer the proposed transaction to the Competition Commission for a detailed review, News Corporation is ready to engage with the Competition Commission on substance.

“News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK.”

News International is bracing itself for another advertiser and reader backlash, following fresh allegations that the Sunday Times and the Sun hacked into Gordon Brown’s private details.

The accusations include The Sun illegally obtaining Brown’s son’s medical details and then publishing a story about his child’s serious illness, according to the Guardian.

News International has yet to comment about the fresh accusations.

More details are set to emerge this afternoon.

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