SHARES IN BRITISH Sky Broadcasting (BSkyB) have fallen significantly in morning trading in London, as investors anticipate new difficulties in News Corporation’s bid to take full control of the broadcaster.
Shares initially fell by around five per cent, but later stabilised at around 3.5 per cent lower than their opening price, trading at around £7.85 per share.
British regulators are still evaluating whether the Rupert Murdoch-owned News Corp should be permitted to take over the 61 per cent of BSkyB it does not already own – but its evaluation of News Corp is likely to suffer in the aftermath of the closure of the News of the World.
Regulators are required to examine the propriety of any potential owner before giving their approval to the deal, and the phone-hacking scandal that forced the NotW’s closure yesterday, that approval could now be in jeopardy.
A statement from the Department for Culture, Media and Sport said that the politician in charge of making the decision, culture secretary Jeremy Hunt, would “consider carefully all the responses submitted” to a public consultation which closed today.
“He will consider all relevant factors, including whether the announcement regarding the News of the World’s closure has any impact on the question of media plurality,” the statement read.
But the collapse in Sky’s price, and the closure of News Corp’s highest-selling newspaper, had little impact on the price of News Corp’s own shares -which barely blipped in the wake of the NotW announcement.
Shares in News Corp, on the NASDAQ stock exchange, fell by a single US cent over yesterday’s trading – despite the NotW announcement coming at Noon in New York time, right in the middle of the trading session.
In fact, in after-hours trading, News Corp shares rose to $18 apiece – higher than their opening value.
So while the market reckons chances of a BSkyB takeover have slipped in the wake of the NotW debacle, it clearly doesn’t think the impact on News Corporation itself will be in any way substantial.
To embed this post, copy the code below on your site
have your say