News Corp drops BSkyB bid and considers sale of newspaper titles

 

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Rupert Murdoch's abandonment of his British media interests became a real possibility last night as his News Corp empire dropped plans to take control of BSkyB and it emerged that the media mogul has discussed selling his News International newspaper titles.

The decision to withdraw the bid for BSkyB came ahead of a House of Commons vote on a motion, backed by the leaders of all three main political parties, to block the News Corp deal. But even News Corp's current 39 per cent stake in the satellite broadcaster is now at risk from a "fit-and-proper" test being conducted by the media regulator, Ofcom.

The likelihood that News Corp could exit from the British newspaper market increased significantly yesterday as The Wall Street Journal, the most prestigious press title in Mr Murdoch's global portfolio, reported that the option of selling the British papers was being considered by the company in an effort to "stem the fallout" from the phone-hacking scandal. The Wall Street Journal said News Corp, which last week closed the News of the World as part of its attempts to limit the damage to its corporate reputation, had "explored whether there were any potential buyers" for the remaining three titles: The Sun, The Times and The Sunday Times.

Yesterday Chase Carey, Rupert Murdoch's No 2, flew into London to try to limit the damage being caused to News Corp's international reputation. Mr Carey, who is seen as an alternative to James as successor to the 80-year-old chairman and chief executive, is known to have comparatively little interest in the newspaper business, which contributes a small fraction of News Corp's total revenues.

Mr Carey said in a statement: "We believed that the proposed acquisition of BSkyB by News Corp would benefit both companies, but it has become clear that it is too difficult to progress in this climate." News Corp said it remained a "committed long-term shareholder" in BSkyB.

But Ofcom said yesterday that its inquiry into whether the company was fit and proper to have a broadcasting licence in Britain was continuing as before. If News Corp were to fail that test it would not be permitted to have any stake in BSkyB.

News Corp last night refused to comment on the possible sale of the News International titles. "It's a fluid and fast-moving situation," one source said. "There's lots of speculation about lots of things we might do."

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