News Corp.’s $12.5 billion bid for British broadcaster BskyB has crumbled as a result of the ever-widening hacking scandal in the U.K.
Sky News reports this morning that News Corp. will be withdrawing its bid for the leading British satellite broadcaster (Update: News Corp. has confirmed that it will be dropping the bid. Statement after the jump). Sky News is partly owned by News Corp. The deal was never a sure thing, but most analysts expected it to pass with provisions in place. The hacking scandal that started at News Corp.’s News of the World and has since expanded to other outlets almost certainly derailed any hope of passing the deal.
As a result of the scandal, U.K. Prime Minister David Cameron announced a review of government oversight of the press, and full investigations. Cameron also said that if it was found that victims of 9/11 were hacked, as has been reported, it would be referred to U.S. authorities.
Stateside, Senator Jay Rockefeller (D-WV) has called for a U.S. inquiry to be opened, focusing on the 9/11 victims.
Rockefeller told the Daily Telegraph:
“The reported hacking by News Corporation newspapers against a range of individuals – including children – is offensive and a serious breach of journalistic ethics,” he said in a statement issued following inquiries by The Daily Telegraph.
“This raises serious questions about whether the company has broken US law, and I encourage the appropriate agencies to investigate to ensure that Americans have not had their privacy violated.
“I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans. If they did, the consequences will be severe.”
The News Corp. statement on BskyB:
News Corporation (“News Corp”) announces that it no longer intends to make an offer for the entire issued and to be issued share capital of British Sky Broadcasting Group PLC (“BSkyB”) not already owned by it.
Chase Carey, Deputy Chairman, President and Chief Operating Officer, News Corporation, commented: “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”