News Corp withdraws BSkyB bid
News Corp has announced that it has withdrawn its bid to buy the remaining 61% of BSkyB that it does not already own.
"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", said Chase Carey, deputy chairman, president and chief operating officer of News Corp
He added: "News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."
The announcement by the company comes ahead of a Parliamentary vote as to whether owner Rupert Murdoch should be told to pull out of the bid, which was expected to be backed by all political parties following the recent phone hacking scandal that lead to the closure of the News of the World this weekend.
The closure of the company's Sunday tabloid newspaper the News of the World came as a shock last week, following allegations that the newspaper hacked the mobile phone of Milly Dowler, as well as members of the families of murdered schoolgirls Holly Wells and Jessica Chapman. It has also been revealed that family members of people killed in the 7/7 terrorist attack in London may also have been targeted.
Over the last week-and-a-half, the story has developed at pace, with Gordon Brown alleging that his bank details were 'blagged' while his son Fraser's medical details were also allegedly intercepted by News International titles - both accusations that the company denies.
The story has also lead to the integrity of the Police force to be questioned, when it was revealed that members of the force had been paid for information, with one security staff member, tasked with protecting the Royal Family, having also allegedly sold private details to News International journalists.
Earlier today, in Parliament, Prime Minister David Cameron said that his former head of communications, Andy Coulson, former editor of the News of the World should be prosecuted if it found that he lied over knowledge of phone hacking, while Labour leader Ed Milliband has repeatedly called on News International chief executive Rebekah Brooks to resign.
Investigations are also taking place to discover why the original police inquiry failed to upturn the information revealed in recent weeks, while another investigation will consider the role of the Press Complaints Commission which looks likely to be overhauled, if not scrapped entirely.
Questions about the relationship between the media and politicians have also been raised, with many MPs claiming to have worked too closely with News International, including the company;s relationship with the Prime Minister himself who was backed by The Sun during the last election.
"As the prime minister has said, the business should focus on clearing up the mess and getting its own house in order," said a spokesperson for David Cameron.
The decision by News Corporation to target BSkyB for a full takeover is thought to be as a result of the company having had a 'profitable recession' while media channels such as newspapers have struggled with both a decline in circulation and advertising.
Former editor of The Sunday Times, Andrew Neil, commented through Twitter: "Murdoch loved his tabloid journalism but with closure of #NoW and collapse of #BSkyB bid it has cost him and his shareholders billions."
Said former deputy Prime Minister John Prescott, one of thousands thought to have been targetted by phone hackers at the company in a tweet: "So BSkyB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I'm happy."
Meanwhile, Robert Peston, business editor for the BBC has described the u-turn as a 'huge humiliation' for News Corporation and speculation has already begun as to whether the company will look to offload its newspapers completely.