BT will sell Murdoch stake

Shares in News Corporation could be shed to head off regulatory opposition to merger with MCI

BT is prepared to sell the 13.5 per cent stake in Rupert Murdoch's News Corporation it will inherit from MCI as part of the planned pounds 35bn merger to head off opposition from regulators.

Industry opposition to the merger with MCI creating the world's second largest telecoms company will focus on the closer links between BT and News Corporation.

However, BT is determined that potential conflicts from its direct shareholding in News Corporation will not stand in the way of the deal.

"The Murdoch stake is small beer when you put it alongside the strategic importance of this deal," a BT insider said. "There are ways of dealing with the question, and we could always sell the stake."

MCI took its stake in News Corporation last year as part of a $2.4bn (pounds 1.5bn) deal to create a global entertainment and information joint venture. BT, which already has a 20 per cent stake in MCI, declined an invitation to join the partnership. BT chairman Sir Iain Vallance said such a move would have been "a red rag to the slightly parochial reulatory bull".

Under the terms of its investment, MCI must vote its stake with the Murdoch family shareholding. However, MCI also has first rights to buy the Murdoch family holding should they choose or be forced to sell. If the merger goes through, BT would be in a position where it would have rights to a near controlling stake in News Corporation.

Mr Murdoch has hinted that he would like to work more closely with BT. He said last year that an alliance with BT was a possibility.

In the UK, BT is already working with Mr Murdoch on a joint Internet venture. Talks are also underway between BT and BSkyB about co-operation on digital satellite broadcasting.

BT is potentially one of Mr Murdoch's biggest competitors in the UK. It is currently prohibited from using its telephone lines to transmit moving talking pictures into the home. However, that restriction could be lifted by a new Labour government.

Mr Murdoch is conscious of the threat that would pose to BSkyB in which News Corporation has a 40 per cent stake.

However, BT has indicated that it is happy to work with Mr Murdoch rather than against him. Although it did not participate in the MCI joint venture with News Corporation, BT has been extremely supportive of the deal.

BT believes there will be a convergence of entertainment, information and telecomunnications as the multimedia industry develops. The combin- ation of News Corporation as a content provider and BT as a distributor would be extremely powerful.

Telecom industry rivals have already identified the tighter links between BT and News Corporation as one of the weak spots in the MCI merger and are prepared to exploit this as part of vigorous lobbying campaign against the merger.

AT&T, which analysts believe could be most threatened by the merger, hinted yesterday that it would be prepared to fight the merger.

"We are confident that any such deal would get the scrutiny it deserves," AT&T said. "We would expect that our government would condition any such merger on the complete and unqualified opening of the telecom market in the UK."

The BT board met yesterday morning to discuss the MCI merger proposal.

"It all looks very positive," a spokesman said.

The MCI board also met yesterday and the two companies are hopeful they will be able to make a statement later today.

Arts and Entertainment
One of the installations in the Reiner Ruthenbeck exhibition at the Serpentine Gallery
artCritics rally to defend Reiner Ruthenbeck's 'Overturned Furniture'
John Cleese is promoting his new book
A-list actresses such as Deepika Padukone get paid a tenth of what their male counterparts make per film
The Black Friday Vines that will destroy your faith in humanity

Arts and Entertainment
The cast of Downton Abbey in the 2014 Christmas special
Robbie Rogers: US former Leeds United footballer, 25, announced he was gay in February 2013, shortly after he left Elland Road. Rogers 'retired' after writing on his blog: 'I'm a soccer player, I'm Christian, and I'm gay.' Has since signed with Los Angeles Galaxy.
peopleUS footballer said he had hoped Michael Sam and Jason Collins coming out might have helped
ebooksNow available in paperback
Arts and Entertainment
Johnny Depp no longer cares if people criticise his movie flops
Arts and Entertainment
All in a day's work: the players in the forthcoming 'Posh People: Inside Tatler'
TVGrace Dent thinks we should learn to 'hug a Hooray Henry', because poshness is an accident of birth
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)

Presents unwrapped, turkey gobbled... it's time to relax

Arts and Entertainment
Convicted art fraudster John Myatt

The two-year-old said she cut off her fringe because it was getting in her eyes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game