Jeremy Hunt gives News Corp-BSkyB buyout the green light

Culture secretary Jeremy Hunt has given News Corp the go-ahead to buy the 61 per cent of BSkyB it does not already own.

He accepted a compromise deal from News Corp which will see Sky News spun off into an independent public limited company – subject to a short consultation which expires on 21 March.

News Corp’s shareholders will take a 39.1 per cent stake in the new company and ‘to ensure editorial independence and integrity in news reporting” it will have a board made up of a majority of independent directors.

This board will include an independent chairman and a corporate governance and editorial committee made up of independent directors, who will have no other News Corporation interests.

News Corporation would not be allowed to increase its shareholding in the new company without permission from the Secretary of State for 10 years.

News Corp will underwrite BSkyB’s estimated £20m a year losses for 10 years.

Hunt said:

‘I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead.

“The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has.

 

‘Throughout this process I have been very aware of the potential controversy surrounding this merger.

“Nothing is more precious to me than the free and independent press for which this country is famous the world over.”

 

“In order to reassure the public about the way this decision has been taken I have sought and published independent advice at every step of the way, even when not required to do so by law.

“And I have followed that independent advice.”

After the consultation Hunt will decide whether to accept the undertakings made by News Corp. If he does accept them he will approve the deal and not refer it to the Competition Commission.

The Department for Culture, Media and Sport this morning published the correspondence between all interested parties on its website.

News Corporation responded this morning by saying that while it continued to believe the proposed acquisition of the shares in BSkyB that it does not already own would not result in insufficient plurality for any audience in the UK, it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission.

“News Corporation notes Ofcom’s opinion to the Secretary of State that ‘we consider that
the revised proposed undertakings would address the plurality concerns identified in our
report of 31 December 2010″.”

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