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U.K. tentatively backs News Corp. buyout of Sky

/ Source: The Associated Press

The British government on Thursday tentatively accepted plans by Rupert Murdoch's News Corp. to buy full control of British Sky Broadcasting — as long as it spins off its Sky News channel.

Culture Secretary Jeremy Hunt said approval was conditional on BSkyB siphoning off Sky News as an independent company. As part of the deal, News Corp. would still retain a 39.1 percent stake in the news channel, the same as its current stake in BSkyB.

The takeover plan is still subject to consultation before gaining final approval. News Corp. would then be free to make an offer for the remaining BSkyB shares.

Murdoch's News Corp. already owns just under 40 percent of BSkyB's shares but wants full ownership to in a bid to get access to all of the pay-television company's profits, which amounted to 407 million pounds ($648 million) in the last half of 2010.

But some media critics and politicians have expressed concern about the deal. Murdoch already has considerable influence in the British media — he owns the top-selling tabloid newspaper, The Sun, as well as The Times, The Sunday Times and the News of the World.

The BBC is among a coalition of British media players demanding an inquiry by Britain's Competition Commission, expressing concerns about its impact.