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News Corp. moving closer to acquire British Sky Broadcasting

03-05-2011 18:19 BJT

LOS ANGELES, March 4 (Xinhua) -- U.S. media giant News Corp. is moving one step closer to taking control of British Sky Broadcasting (BSkyB) after receiving the backing of a key British official, a newspaper report said on Friday.

In its purchase bid, News Corp. has proposed to spin off Sky News into a separate company to address concerns about the editorial independence of the 24-hour news operation.

This proposal has won the backing from British Culture Secretary Jeremy Hunt, who said on Thursday he was inclined to accept the proposal, according to the Los Angeles Times.

News Corp., which already owns 39 percent of BSkyB, announced its intention last summer to buy the remaining 61 percent stake in Britain's largest pay-TV operator for 12.7 billion, according to the report.

BSkyB Chief Operating Officer Chase Carey said at the time that the deal would help reduce the company's reliance on cyclical ad revenue by increasing the amount of money it would receive from subscription fees.

The proposal has met with opposition from a group of media companies, including the owners of the Guardian, Daily Mail and Telegraph newspapers, which contended that it would have "serious and far-reaching consequences for the media," because News Corp. already owns four of Britain's largest newspapers, the report said.

Under News Corp.'s proposed remedy, Sky News would become an independent, publicly traded company, with shares distributed to existing BSkyB shareholders. News Corp. would retain a minority stake. Sky News would also receive a 10-year carriage agreement from BSkyB, assuring it a long-term revenue stream, according to the report.

News Corp.'s initial offer in June had been rejected by Sky directors as too low.

A final favorable decision, pending a 15-day public comment period, would avoid a lengthy and costly regulatory review by Britain's Competition Commission, analysts said in remarks published by the paper.

Editor:Xiong Qu |Source: Xinhua

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