Rupert Murdoch has withdrawn his $12 billion bid for British satellite broadcaster, BSkyB, in the wake of alleged phone hacking within his News Corp empire.
Murdoch announced the withdrawal yesterday at a board meeting at his headquarters in Wapping, East London.
The announcement came as the House of Commons was ready to debate on whether the media baron's bid for a full takeover of BSkyB should be stalled until after the police inquiry into the News of the World phone hackings.
In June 2010, Murdoch's US-based News Corp bid for a full take over of BskyB. It already owns a 39% stake.
BskyB rejected News Corp's 700 pence-per-share offer and demanded 800 pence-per-share instead.
Ten days ago, News Corp looked set to win the bid, having won the approval of British Culture Minister, Jeremy Hunt.
On Tuesday, Hunt referred the bid to The Competition Commission.
Last night BskyB's share price closed at 705.5 pence in London, while NewsCorp's share price has fallen more than 11% in the past five days of Australian trade, and the company has lost more than $5 billion in value.
Murdoch, together with his son and likely heir, James Murdoch, and News International chief executive, Rebekah Brooks, had agreed to stand before a judicial inquiry into the alleged phone hackings, scheduled for Tuesday next week.
Questions have been raised as to whether Murdoch's withdrawal is merely a way of delaying the bid as he rides out the current media storm.
News Corp deputy chairman, Chase Carey, said the bid had become "too difficult to progress in this climate".
The withdrawal follows a tumultuous 10 days for the Murdoch empire, after Rupert Murdoch closed the News of the World, Britain's highest selling Sunday tabloid, last weekend.
The closure came after journalists were alleged to have hacked into the mobile phone voicemails of murdered school girl, Milly Dowler.
The case escalated when it was revealed that other murdered schoolgirls' and their relatives' phones had been hacked.
The phones of relatives of dead British soldiers and London bomb attack victims are also thought to have been intercepted.
News of the World journalists are also believed to have paid police to obtain information for stories.
The allegations have spread to other News International newspapers, including The Sun.
BSkyB is a satellite television giant in the United Kingdom and broadcasts live English Premier League football and blockbuster movies.
The broadcaster has 10 million household subscribers, who access its internet broadband and telephone services by paying monthly fees.
David Cameron yesterday announced a sweeping inquiry into a new press regulation system, on top of the investigation into the lawbreaking behaviour of journalists, police and News Corp executives.
Meanwhile, rival publisher, the Mirror Group, is pushing ahead in an effort to capitalise on the distribution avenues left open after News of the World's closure.
The Sunday Mirror and People is expected to increase its distribution from one to two million this weekend, after a reported 10% rise in distribution last Sunday.
The marketing drive is likely to include a television ad that will launch this week.
The final issue of News of the World sold 3.8 million copies, up 1.1 million on the previous week's edition.
Have something to say? Send us your comments using the form below or contact the writer at lucybarbour@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.