The News Corporation announced that it was prepared to submit its offer for the 61 percent of BSkyB it does not already own to the country’s Competition Commission, an independent group that considers mergers and acquisitions within the United Kingdom. The company had previously offered to spin off the Sky News channel to avoid referral to the commission, but now says it wants to keep Sky News and take its chances with the regulator.
“News Corporation is ready to engage with the Competition Commission on substance,” the company said in a statement, adding that it “continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the U.K.”
The announcement gives the deal some breathing room, avoiding an emergency vote called by the opposition Labour Party for Wednesday, when politicians were likely to have dealt a fatal blow to the acquisition. In the longer term, the commission’s lengthy review process, which could take up to eight months, could give the News Corporation some distance from the political fallout of the hacking scandal.
But the move also raises the question of just how much the News Corporation might balance the prospects of the BSkyB acquisition, which would be the largest in the company’s history, with its newspaper business.
Mr. Murdoch built the News Corporation on newspapers — his first love and still where he devotes most of his time and energy — but the tabloid scandal has become a hindrance to his more lucrative digital and entertainment properties. With The News of the World already shut down, many observers wonder whether Mr. Murdoch would stomach selling or closing more papers.
David Bank, a media analyst at RBC Capital Markets in New York, said it was a decision that would win approval from investors.
“Investors would probably want nothing more,” he said. “It’s the worst business in the portfolio.”
But Claire Enders, a media analyst in London, said the News Corporation was still far from such a decisive move as jettisoning all of its British newspapers. “The newspapers are very dear to Mr. Murdoch’s heart,” she said. “You have also got to find a buyer for these things. They are barely profitable.”
The Murdoch family “is in a bunker,” according to one person who is close to the company but declined to be identified discussing confidential matters. But, this person added, the idea of the News Corporation getting out of the newspaper business was very unlikely.
Shares in the News Corporation fell 7 percent on Monday. Since the scandal exploded last week, shares in the company have declined 11.4 percent; shares of BSkyB have fallen more than 15 percent.
Thomas Eagan, an analyst for the London-based company Collins Stewart, said the pullback in the BSkyB stock price could actually help the News Corporation “to get it cheaper than it otherwise would have.”
Acquiring BSkyB would increase the News Corporation’s cash flow and improve its business mix, further reducing the significance of the company’s newspapers, which account for a smaller portion of its revenues than television or film.
BSkyB is firmly rooted across the British media marketplace. In the United States, it would be akin to rolling DirecTV, Turner Broadcasting and ESPN into one.
Like DirecTV, BSkyB beams channels to paying subscribers; it has 10 million in the United Kingdom, making it the biggest such service in the country. Like Turner, it operates news and entertainment channels, including Sky News. Like ESPN, it operates a suite of hugely popular sports channels.
“It is clearly embedded in the viewer’s media habits,” said Alex Degroote, a media analyst for Panmure Gordon Co. in London.
As the bid now comes before the commission, the referral is sure to delay the News Corporation’s 13-month-old effort. A spokeswoman declined to comment beyond the company’s statement.
However, the contentious bid is also the subject of a separate inquiry by the government media regulator, Ofcom, about the News Corporation’s status as “fit and proper” to hold a broadcast license after what looked like a rubber-stamp decision was thrown into doubt by the revelation that The News of the World had hacked into the voice mail of Milly Dowler, a 13-year-old girl who was abducted and killed in 2002.
Since then, the scandal has mushroomed to include allegations that the paper hacked into the accounts of dead soldiers and that the News Corporation-owned Sunday Times used subterfuge to get personal information about former Prime Minister Gordon Brown.
Deputy Prime Minister Nick Clegg on Monday became the most senior official to publicly urge Mr. Murdoch to abandon the takeover, deepening the hacking scandal that has been transformed from a long-simmering controversy into a full-blown crisis swirling around Mr. Murdoch’s British operation, News International, and its chief executive, Rebekah Brooks.
Mr. Clegg urged Mr. Murdoch to “look how people feel about this — look how the country has reacted with revulsion to the revelations” about the phone-hacking scandal. ”Do the decent and sensible thing, and reconsider, think again about your bid for BSkyB.”
Ed Miliband, the Labour leader, had already called for the bid to be stopped. While Prime Minister David Cameron has not gone so far, on Monday he said that “if I was running the company right now I think they should be focused on cleaning that up rather than on the next corporate move.”
Graham Bowley reported from London, and Brian Stelter from New York. Ravi Somaiya, Julia Werdigier and John F. Burns contributed reporting from London.
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