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Sky promises business as usual as News Corp pulls out of bid

Following News Corp’s decision to withdraw its bid for BSkyB ahead of yesterday’s parliamentary vote calling for the company to abandon the bid, the UK pay TV operator said that the company continues to present “a compelling investment case and significant growth opportunities”, as demonstrated by its recent operational and financial performance and strong balance sheet.

It was left to Chase Carey, deputy chairman, president and chief operating officer, News Corp, to deliver the announcement that the company was pulling out of the attempt to acquire the shares in Sky that it did not already own, in the wake of the News of the World phone hacking scandal. “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,” said Carey in a statement.

While News Corp has not ruled out another bid in the future, many observers believe this is unlikely, given the current political hostility and the series of regulatory and commercial hurdles that the company would have to surmount. Figures within News Corp have also indicated that it will focus on spending its capital outside the UK rather than risk further battles.

BSkyB CEO Jeremy Darroch said: “We are delivering on our clear, consistent strategy and are building a larger, more profitable business for the long term. We remain very confident in the broadly based growth opportunity for BSkyB as we continue to add new customers, sell more products, develop our leading position in content and innovation, and expand the contribution from our other businesses. I would like to commend all our employees for their unrelenting focus throughout the offer period and thank them for their continuing support.”

Independent non-executive director and deputy chairman Nicholas Ferguson said that “with good momentum and a range of options for continued growth, BSkyB is well positioned to increase earnings and cash flow and deliver higher returns for shareholders”.