News Corporation, headed by Rupert Murdoch, has backed out of its bid for broadcaster BSkyB following the developments in the phone hacking scandal.
News Corp, which already has 39% shareholding in the satellite broadcaster (and ownership of The Sun and The Times newspaper) said it will retain its shares in the company in the long term.
President of News Corp, Chris Carey said: “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.”
Ivan Lewis, shadow culture secretary claimed the “remarkable” news as “a victory for the public of this country, a victory for Parliament and a victory for the tremendous leadership that Ed Miliband has shown ever since this scandal emerged”.
He added that the judge-led inquiry and criminal investigation should continue despite the bid withdrawal.
He said: “What we mustn’t allow this announcement to do is to end the need to get to the bottom of this unethical and criminal behaviour that has so damaged our newspaper industry and has also threatened to undermine our democracy.”
Lord Prescott, former deputy prime minister, who is convinced that his phone was also hacked by the News of the World, tweeted:
“BSkyB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I’m happy.”
BSkyB shares fell from 850p to 683.5p as the pressure mounted on Murdoch to drop the bid. This pressure intensified when David Cameron joined the campaign for him to drop the bid.