BSkyB shares soar after Cable gaffe

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Rupert Murdoch's News Corp is aiming to take control of BSkyB

BSkyB shares have leapt higher as experts said Vince Cable’s embarrassing own goal increased News Corp’s chances of gaining clearance for its Sky takeover.

Shares in the broadcasting giant rose 2% on Wednesday – to their highest level since Rupert Murdoch’s company launched his bid in June – after Investec Securities said the probability of News Corp being given the green light to acquire the remaining 61% of BSkyB it does not already own had risen to 90% from 66%.

The stripping of Mr Cable’s responsibility for media regulation following his comments to undercover newspaper reporters will now see the final decision rest with Culture Secretary Jeremy Hunt.

He is due to receive a report on media plurality from regulator Ofcom at the end of the month.

But the European Commission has already given the deal the go-ahead, saying it is confident the proposed acquisition “will not weaken competition in the UK”, while Mr Hunt told the Financial Times in June that “it does seem to me that News Corp do control Sky already”.

Investec’s media analyst Steve Liechti said: “We believe the proposed takeover is now a lot more likely.”

He added: “Given that, in our view, Sky is likely to appeal or litigate any adverse opinion into the ground now, we move our probability of takeover to 90%.”

News of Mr Murdoch’s bid for Sky in June had already sent the group’s shares soaring – hitting their highest level since February 2004 in recent weeks.

In June, BSkyB rejected News Corp’s 700p-a-share approach, which values the FTSE 100 Index company at around £12 billion. Sky said the proposal significantly undervalued the business and called for an offer in excess of 800p a share.

Despite their differences over price, the two parties agreed to work together on the regulatory process required for a tie-up.

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