Government says no decision on News Corp-BSkyB review

LONDON (Reuters) - The government has not yet decided whether to refer for review the proposed takeover of pay-TV group BSkyB by Rupert Murdoch’s News Corp, it said, responding to a report a review was likely.

The BBC said Business Secretary Vince Cable was likely to ask the media regulator Ofcom to look at the impact of any takeover and whether it would reduce the plurality of voices within the media sector.

News Corp, which has said it wants to buy the 61 percent of the dominant pay-TV group it does not already own, also owns British newspapers The Sun, sister paper the News of the World and the Times and Sunday Times.

“The Secretary of State has not made a decision on this matter -- indeed at this stage there is not even a decision for him to take,” the Department for Business said in a statement. “We will not be speculating on this issue.”

Analysts have said they fully expect Cable to refer the takeover to Ofcom for political reasons because Murdoch’s mass-selling Sun newspaper backed the Conservative party at the recent election instead of Labour.

The Conservatives then formed a government with Cable’s Liberal Democrat party.

The former editor of the News of the World, now Prime Minister David Cameron’s director of communications, is also at the centre of a row over whether it illegally hacked into phone messages made by politicians and celebrities.

News Corp had proposed to buy BSkyB for 700 pence per share, or a total of $12 billion (7.7 billion pounds), but BSkyB’s independent directors have demanded an offer of over 800p. The two sides have put price negotiations on hold while they seek regulatory approval.

News Corp is now in a so-called pre-notification period with the European Union, in which the EU’s executive is ensuring it has all the information it needs from News Corp before the notification becomes formal.

Formal notification is necessary to trigger any review.

A spokeswoman for Ofcom said the regulator had not yet received any notification from the department.

Citi analysts said in a recent note they expected Cable to refer the case for review to Ofcom, given the “politically charged nature of this merger situation,” but that it would still be approved.

Reporting by Kate Holton and Georgina Prodhan; Editing by Michael Shields