News Corp’s Sky bid hits snag after News of the World scandal

Culture secretary Jeremy Hunt is referring News Corp’s bid to take over BSkyB back to the media regulators, over concerns it may not remain a “fit and proper” media owner following the phone hacking scandal that closed the News of the World.

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The move comes a day after the News of the World printed its final edition, doubling its usual print run to more than 5 million copies.

Hunt has written to Ofcom and the Office of Fair Trading (OFT) to ask 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.

The letter also asks whether the closure of the News of the World adds to existing concern around competition in the media marketplace, if News Corp was to take over the 61% of BSkyB it does not already own.

Hunt could now refer the bid to the Competition Commission, after the recent developments at the News of the World, despite previously giving the green light for the takeover to go ahead last month.

Shares in BSkyB fell 7.3% to below 700p on opening this morning, following uncertainty about the takeover.

The News of the World donated all its advertising space and sale proceeds to charity yesterday (10 July), following the phone hacking scandal that led to the newspaper’s closure.

Charities including St John Ambulance, One, Wellbeing of Women, Pennies for Life, took up free ad spots.

Ashley Stockwell, global sales and marketing director of Global Ethics, the owner of the One Brand, which took up a half-page ad in the paper, says the charity knew a risk was involved in being associated with the News of the World, but it was an opportunity the charity “had to take”.

Stockwell says the charity has only received one negative response to the advert so far, which he has responded to personally.

Rob Wood, marketing and communications manager for the Children’s Trust, which took out a full-page ad in the paper, says: “We did think hard about it before we submitted our advert – there was no way we were condoning the alleged practices that took place at the paper.

“We are a national charity and one of the challenges we face is making sure beneficiaries are aware of us, this was an opportunity to get in front of a nationwide audience that we could not previously have reached.”

Charities including The Royal British Legion, The Salvation Army and the RSPCA rejected News International’s offer for free advertising in the last issue of the News of the World yesterday.

Rival Sunday newspapers, including the Sunday Mirror, Sunday Express and The Mail on Sunday all led with promotions and celebrity stories on their front pages yesterday in a bid to attract News of the World readers.

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