July 13 (Bloomberg) -- U.K. Prime Minister David Cameron’s coalition government will today side with the opposition Labour Party in calling on News Corp. to withdraw its bid to take full control of British Sky Broadcasting Group Plc.
A Labour motion, to be debated in Parliament in London, reads, “This House believes it is in the public interest for Rupert Murdoch and News Corp. to withdraw their bid for BSkyB.” The debate will finish with a non-binding vote, with the Conservatives, their Liberal Democrats partners and Labour, who between them have 618 seats in the 650-member House of Commons, voting in favor.
“We support it,” Cameron’s spokesman, Steve Field, told reporters yesterday. “The prime minister will support it, the government will support it.”
News Corp. bought itself time to weather the furor over phone hacking at its now-defunct News of the World newspaper by pushing Culture Secretary Jeremy Hunt to refer the bid for BSkyB to regulators, which will take at least six months to reach its conclusions. BSkyB is the U.K.’s biggest pay-TV broadcaster.
“They will still be extremely reluctant to write it off,” said Sam Hart, an analyst at Charles Stanley & Co. in London. “In the near and medium term it will be difficult for them to continue to apply pressure if the whole political establishment is against them.”
BSkyB shares fell 3.3 percent to 692 pence in London yesterday, below the 700 pence a share News Corp. offered in June last year to take full ownership of the company. It was the sixth consecutive day of decline.
Labour leader Ed Miliband, who met with Cameron and Deputy Prime Minister Nick Clegg last night to discuss the terms of reference for public inquiries, said there is still a risk the bid is decided on before police finish their probe into phone hacking.
Even though today’s vote will amount to an expression of political opinion and won’t be binding on News Corp., it is necessary to “send a clear signal to Rupert Murdoch about what needs to happen,” he said in comments to broadcasters.
Cameron has pledged to hold separate public inquires into the police handling of the original phone-hacking allegations against the News of the World and the conduct of media organizations. Police investigations into the hacking scandal and claims officers were paid for stories are under way.
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