July 8 (Bloomberg) -- The U.K. government said it will take “some time” before giving a final ruling on News Corp.’s 7.8 billion-pound ($12.4 billion) takeover bid for British Sky Broadcasting Group Plc, sending the broadcaster’s shares to the steepest decline in 2 1/2 years.
A week-long consultation on additional conditions imposed by the government on Rupert Murdoch’s News Corp. for the takeover ends at noon in London. As of yesterday, more than 135,000 messages of objection had reached the government.
“Given the volume of responses, we anticipate that this will take some time,” the Departure for Culture, Media and Sport said in a statement today, without specifying a timeframe. “The secretary of state has always been clear that he will take as long as is needed to reach a decision.”
Prime Minister David Cameron said today it is up to regulator Ofcom to decide whether News Corp. is “fit and proper” to take full control of BSkyB. He also said the takeover review will take some time.
“There are proper organizations and procedures,” Cameron said at a news conference in London today. “It is very important that this is done in the proper way.”
While Culture Secretary Jeremy Hunt has said he is minded to accept the proposals, U.K. lawmakers have called for the bid to be halted pending a public inquiry. News Corp. said yesterday it would close the 168-year-old News of the World tabloid after allegations that its journalists tapped the voice mails of murder victims and paid police officers for stories.
BSkyB fell as much as 47.5 pence, or 5.9 percent, to 764.5 pence, the steepest decline since January 2009, and traded at 779 pence as of 11:21 a.m. in London. The shares have fallen 8.4 percent from a record of 850 pence on July 4 before reports of the new allegations. News Corp. offered 700 pence a share for the 61 percent of BSkyB it doesn’t already own in June last year.
In deciding on the bid, Hunt will consider “all relevant factors including whether the announcement regarding the News of the World’s closure has any impact on the question of media plurality,” the culture department said.
“No one ever expected this deal to go through smoothly,” said Alexander Wisch, an equity analyst at Standard & Poor’s in London, who doesn’t own the shares. “I was expecting the deal to go through in the second part of the year, maybe it will drag on a bit longer.”
Cameron said News International Chief Executive Officer Rebekah Brooks, who was running the News of the World when telephones were hacked, should have been removed. Cameron’s coalition partners, the Liberal Democrats, called on Ofcom today to investigate whether it’s appropriate for BSkyB to hold a broadcasting license.
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--With assistance from Gonzalo Vina, Andrew Atkinson and Sara Marley in London. Editors: Kenneth Wong, Rob Valpuesta
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