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13 July 2011

News Corp withdraws BSkyB bid

Ahead of Commons vote, Rupert Murdoch withdraws bid to take full control of the company.

By Samira Shackle

Rupert Murdoch’s News Corporation has withdrawn its bid to take full control of BSkyB, ahead of a Commons vote urging the company to do so.

News Corp made the following statement:

News Corporation (“News Corp”) announces that it no longer intends to make an offer for the entire issued and to be issued share capital of British Sky Broadcasting Group PLC (“BSkyB”) not already owned by it *.

Chase Carey, Deputy Chairman, President and Chief Operating Officer, News Corporation, commented: “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. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”

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However, it is worth noting that the statement leaves open the possibility of making another bid:

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For the purposes of Rule 2.8 and other relevant provisions of The City Code on Takeovers and Mergers (“City Code”), News Corp reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for BSkyB and/or take any other action which would otherwise be restricted under Rule 2.8 of the City Code within the next six months in the event that:

(i) there is an announcement other than by News Corp or any subsidiary of News Corp of an offer or possible offer for or a merger or possible merger with BSkyB; or

(ii) BSkyB announces a whitewash proposal for Rule 9 purposes or a reverse takeover not involving News Corp or any subsidiary of News Corp.

As Carey says, it is impossible to progress the bid “in this climate”. It could be a politically expedient move to withdraw now and return to it later.

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