UK gives Murdoch last chance to avoid BSkyB probe

Britain is to give News Corp a final chance to avoid a prolonged and costly investigation into its proposed $12 bln buyout of BSkyB, in a move that is likely to draw criticism from rivals.
Britain's media regulator, Ofcom, has already examined the deal over fears it would give Rupert Murdoch's News Corp too much influence over the media and public opinion.
The government said on Tuesday that Ofcom recommended referring the deal to the Competition Commission but Culture Secretary Jeremy Hunt would first consider proposals put forward by News Corp to alleviate competition concerns.
Analysts and lawyers have speculated that News Corp could offer to spin off its news channel Sky News or offer undertakings not to bundle its different services, for instance selling packages of TV and newspapers.
However, several media bankers have told Reuters they do not know of any obvious buyer for Sky News.
"On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality," Hunt said in a statement.
"However, before doing so it is right that I consider any undertakings in lieu offered by any merging party which have the potential to prevent or otherwise mitigate the potential threats to media plurality identified in the Ofcom report."
News Corp, led by Murdoch, wants to buy the 61% of the British satellite broadcaster it does not already own for 7.8 bln pounds ($12.5 bln) to consolidate a business it helped build. BSkyB has demanded a higher offer but said it will first work to get the deal past regulators before negotiating a price.
News Corp owns about a third of the newspaper market in Britain including The Times and The Sun, the country's best-selling tabloid which supported Prime Minister David Cameron during last May's national parliamentary elections.
The Competition Commission would look at the merger on the grounds of media plurality and whether it would reduce the number of "voices" in the sector.
The European Commission, which looked at the deal in terms of impact on competition, has already granted unconditional approval.
News Corp has offered to pay 700 pence per share for BSkyB, which dominates Britain's pay-TV market with 10 mln customers due mainly to its superior sports and movie offerings.
The independent directors of BSkyB have said they would be prepared to support an offer of above 800 pence and consistently strong results from the British company since the offer was made is likely to strengthen their position.
Simon Holmes, a competition lawyer at SJ Berwin, told Reuters that the deal should be sent to the Competition Commission because it was too complicated to be decided without a full investigation.
"Why wouldn't you refer it to the Competition Commission if that is what Ofcom has suggested?" Holmes said, before the statement was released.
"There may be some construct that can be put in place, but I'm not sure it should be done on the hoof and without a reference, this is something that should be looked at in detail."