BSkyB shares fall amid fears of takeover block

SHARES in British Sky Broadcasting continued to fall on worries that News Corp’s takeover bid might be blocked, getting no immediate relief from the company’s announcement late in the day that it was closing the scandal-racked News of the World.

Shares were down 1.8% at 812 pence at the close, extending losses over three days to 4.5%. They had traded as high as 850 pence on Monday, before it was alleged that the newspaper had hacked the phone of murdered schoolgirl Milly Dowler. The paper also allegedly hacked the phones of grieving families, celebrities, royals and politicians in a quest for attention-grabbing headlines.

Rupert Murdoch’s News Corp, the paper’s owner, has gained preliminary clearance by the British government to bid for the 615 of BSkyB shares it doesn’t own.

Some British politicians, however, have called for the deal to be blocked.

The British Broadcasting Corp reported that Culture Secretary Jeremy Hunt would delay a decision on BSkyB until September, but Hunt’s department said no date had been set for an announcement.

A consultation period on Hunt’s final proposals for clearance ends today. The department said it had received more than 100,000 comments from the public on the proposal but refused to say how many were for or against the deal.

Sam Hart, analyst at Charles Stanley & Co, said investors were nervous.

It was not clear whether News Corp’s decision to close News of the World might ease opposition to its takeover bid for BSkyB.

Hart was confident, however, that News Corp would table an offer despite the furore.

“Obviously the market is thinking that there is a possibility that News Corp’s takeover of BSkyB could certainly be delayed, if not blocked,” Hart said.

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