By Victoria Howley
LONDON (Reuters) - Britain may approve News Corp's
"A spin-off of Sky News is more likely than a sale," one of the people said. "It is also possible that News Corp will keep a stake in Sky News similar to the current level of ownership it has in BSkyB," this person said.
The second person said that several options are still being discussed around the structure of the deal.
The takeover saga has become politically charged, raising questions about the British government's relationship with Murdoch's powerful media empire and damaging the career of a government minister.
The BBC reported that News Corp has offered to sell Sky News and has also offered to "in effect" cover the costs of the money-losing channel for many years through a long-term contract.
Culture Secretary Jeremy Hunt is likely to approve the deal, possibly "as soon as tomorrow," the BBC's Robert Peston said on the broadcaster's website. In making his announcement, Hunt would launch a 15-day public consultation.
BSkyB declined comment and News Corp was not immediately available for comment.
The ministry responsible for vetting the merger said Hunt has not yet made a decision. "We will make an announcement in due course," a spokesman said.
LAST CHANCE
On January 25, the British government gave News Corp a final chance to avoid a prolonged investigation into the buyout.
Hunt said then he would consider unspecified proposals put forward by News Corp to alleviate competition concerns before deciding whether to refer the proposed deal for a full, six-month competition inquiry.
Murdoch is seeking to buy the 61 percent of British Sky Broadcasting Group Plc. or BSkyB, which News Corp does not already own -- aiming to consolidate a business it helped build but raising concerns that he could gain too much control over the media and too much influence over public opinion.
The move comes at a time when Murdoch's empire is under fire in Britain for the conduct of its journalists in a phone-hacking scandal.
The affair has already cost the job of Andy Coulson, Prime Minister David Cameron's communications chief, who was editor of top-selling Sunday tabloid the News of the World at the time but who denies knowledge of wrongdoing at the newspaper.
The takeover saga has also damaged the career of Business Secretary Vince Cable, a popular member of the smaller Liberal Democrat party in the governing coalition, who was secretly taped saying he had "declared war" on Murdoch.
News Corp said in January it strongly disagreed with the conclusion drawn by regulator Ofcom that a referral was needed, but said for the sake of expediency it would work with the government to find a solution.
News Corp owns about a third of the newspaper market in Britain, including The Times and the country's best-selling tabloid The Sun, both of which supported Cameron's Conservatives in last May's general election.
News Corp has offered to pay 700 pence per share for BSkyB, which dominates Britain's pay-TV market with 10 million customers due mainly to its sports and movie offerings; but Sky's independent directors are looking for more than 800 pence.
BSkyB shares closed 6 pence higher at 799 pence as speculation has grown in recent weeks that the government would announce a favorable ruling, putting pressure on News Corp to significantly increase its offer. News Corp shares were trading 1 percent higher at $17.21.
(Additional reporting by Rhys Jones, Kate Holton, Keith Weir, Adrian Croft; Editing by Gerald E. McCormick)
