Hunt set to accept Sky News offer

Rupert Murdoch’s News Corp is proposing a deal to place the news operation into a separate company, but retain a 39.1 per cent stake in Sky News.

The move comes as News Corp seeks to avoid a full-blown competition inquiry into its plans to buy the 61 per cent of BSkyB it does not already own after Mr Hunt said last month he planned to refer the deal to the Competition Commission.

News Corp is offering to hive off Sky News into a company controlled by independent directors and with an independent editorial board.

It would fund the news channel for 10 years and agree a seven-year licensing agreement for it to use the Sky News name.

Existing BSkyB shareholders will be given an equivalent stake in the new company, but News Corp would not be allowed to increase its 39.1 per cent shareholding for 10 years without permission from the Culture Secretary.

Mr Hunt will consult on the plans until March 21 before making a final decision.

He said: “Informed by advice from the regulators, I believe that these (proposals) will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead.

“The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has.”

He added he had been “very aware” of the controversy surrounding the deal.

He said: “Nothing is more precious to me than the free and independent press for which this country is famous the world over.

“In order to reassure the public about the way this decision has been taken, I have sought and published independent advice at every step of the way, even when not required to do so by law. And I have followed that independent advice.”

News Corp welcomed today’s announcement.

It said that while it still believes the planned BSkyB takeover would not result in insufficient media plurality, the plans were submitted to avoid a “lengthy and costly review by the Competition Commission”.