U.K. satcaster's stock rises by almost 2%
News Corp.’s $19 billion play to own U.K. paybox BSkyB outright has been boosted by the fact that Media Minister Jeremy Hunt is now responsible for ruling on the deal.
The satcaster’s shares rose by almost 2% on the London stock exchange, closing at £7.43 ($11.42) on Wednesday, a reflection of the growing belief that Rupert Murdoch will succeed in his attempt to buy the 61% of BSkyB he does not already own.
On Tuesday Business Secretary Vince Cable was stripped of his power to have the final say on the bid when it emerged that he’d told undercover reporters that he intended to “declare war on Murdoch.”
Media regulator Ofcom is due to rule on the News Corp. takeover and its effect on media plurality by the end of the year. If the watchdog decides there is a case to answer, a referral to the Competition Commission is possible in January. But observers believe that Prime Minister David Cameron’s decision to replace Cable with Hunt is a leg up for Murdoch.
“The odds of a referral have decreased significantly,” said Conor O’Shea, an analyst at Kepler Capital Markets in Paris, quoted by Bloomberg. “There’s a major perceived change in the way that Jeremy Hunt views things as opposed to Vince Cable.”
Speaking at the Edinburgh Television Festival in August, Hunt praised BSkyB for having “revolutionized the way we watch TV.”
In June, following the news that Murdoch was seeking to take full ownership of the paybox, Hunt said, “It does seem to me that News Corp. controls Sky already, so it isn’t clear to me that in terms of media plurality there is a substantive change.”
On Tuesday, the European Commission said there was no reason to block the deal on competition grounds.