Instant view: News Corp withdraws bid for BSkyB

LONDON (Reuters) - News Corp has withdrawn its $12 billion bid to buy out the 61 percent of broadcaster BSkyB it does not already own after the government turned on Rupert Murdoch over a phone hacking scandal.

Below is analyst, market, political and industry reaction:

THOMAS EAGAN, ANALYST, COLLINS STEWART

"They're under such incredible pressure and in such a difficult political climate they felt they had to withdraw the bid. It doesn't mean they couldn't wait to bid again in a year's time but it certainly means BSkyB is going to be cheaper at a later date.

"I think the already announced buyback means they're already committing cash. We don't think they're going to make any major acquisitions in the interim."

ALAN HOWARD, ANALYST, CANACCORD GENUITY

"As far as I'm concerned the deal has been dead in the water for some time now. It simply recognizes what is clear political reality which is that there is no one in the British government who would have felt comfortable waving that deal through. Arguably they were looking for any excuse they could find to either delay it or obstruct it.

"They've recognized reality in that the good news for BSkyB shareholders is that we can now all focus once again on the fundamentals of the business and try and think about what kind of fair value the stock has. It probably has come down a little bit too far.

"There will probably be an ongoing discount to reflect firstly the possibility that News Corp may be forced or voluntarily reduce their stake in BSkyB over the medium term and secondly that it is very unlikely there will be another bidder for the company giving News Corp's position."

LOUISE MENSCH, CONSERVATIVE MP, (ALSO ON DCMS SELECT CTTEE)

"They have done the right thing and shown some leadership. I think this goes beyond one paper and the rest of press can't hide behind News International's skirts."

STEVE LIECHTI, ANALYST, INVESTEC

"This is not entirely unexpected given the political pressure that was on News Corp. BSkyB goes back to a more fundamental valuation and the question now is what are they going to do, are they going to invest their cash or will they return it to shareholders. We think there's still a risk of Ofcom looking at News Corp and its directors though."

CHRIS MARANGI, PORTFOLIO MANAGER AT GABELLI MULTIMEDIA FUNDS, WHICH HOLDS SHARES IN NEWS CORP

"This is not surprising, it doesn't mean the desire's not there. It's politically savvy, and he needs to buy his time and let this blow over.

"They made a gesture in authorizing the buyback for the larger share repurchase, the company has the financial capacity to do a lot of things, whether its buybacks or acquisitions.

"At this time it's circle the wagons and protect existing operations."

CONOR O'SHEA, ANALYST, KEPLER CAPITAL MARKETS

"It's not a surprise. It looked like yesterday the bid was maybe still alive because they'd referred it to the Competition Commission which gave some time for everybody to cool off so it looked like the bid was alive but once Cameron and so on caved in, that's it, there's no way they could go against that so that's it. The bid's not going to be revived at all anytime soon so they'll just have to carry on as they were before."

ED MILIBAND MP, LEADER OF THE Labor PARTY, REACTING TO THE WITHDRAWAL OF THE BID FOR BSKYB

"This is a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility.

"People thought it was beyond belief that Mr Murdoch could continue with his takeover after these revelations.

TOM WATSON, MP WHO HAS PUSHED FOR INQUIRY, (TOLD SKY NEWS)

"Like everything with this company they were dragged into it kicking and screaming, I think they had no choice when you had three party leaders united saying withdraw the bid, what else could they do?

When asked if he was surprised by News Corp's decision, he said: "Not really, I mean you know the nation is getting angrier and angrier about this because actually the real issue is there is no corporate humility from News International.

"We've still not seen anyone of the top take responsibility for creating a culture in a newsroom that would allow a journalist to target the phone of an abducted 13-year-old girl. And until somebody carries the can, and somebody apologies at the top of that company I just think this is going to run on and on."

JOHN PRESCOTT, MP WHO CLAIMED HIS PHONE WAS HACKED, ON TWITTER

"So BSkyB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I'm happy."

GRAHAM ALLEN, Labor LAWMAKER (TOLD BBC TELEVISION)

"I think we are chasing the wrong hare. This BSkyB stuff has been important, it's been resolved now, there's a nice cozy consensus in the House of Commons about what we need to do about it, and they have withdrawn the bid.

"The big picture here is about regulation of the media and ownership of the media, and I think if we now get just sucked into which celebrity had their phone tapped or what horrendous thing emerged from the News of the World, we'll be missing the really big stuff."

STEPHEN WILLIAMS, LIBERAL DEMOCRAT MP

"Good, that's excellent news. I think it is a recognition of reality staring them in the face."

IAN WHITTAKER, ANALYST, LIBERUM CAPITAL

"They've probably thought after some pretty savage attacks on them out of the Commons today there's no way they can go through with this. Probably they also didn't want the spotlight on them. There are worries about it spreading to the US.

"What does it mean for BSkyB? There will be some initial shock. But consensus seems to be that it is a fundamentally good company that's held up well in the recession. Also, if News Corp wants this thing for cash because it sees it as a cash machine, does that mean you'll get the dividend being pushed up?"

JANE COFFEY, FUND MANAGER, ROYAL LONDON ASSET MANAGEMENT

"It's all become too political now, but this doesn't mean that he's withdrawn the bid forever."

STEVE HEWLETT, MEDIA CONSULTANT

"It wasn't realistically possible for News Corp to pursue the bid in this current environment. The business logic of the deal for News Corp remains as strong as it ever did but there's no guarantee the fit and proper person concern will go away.

"I can't see anyone else diving in to buy it and the logic of News Corp wanting to buy it is pretty clear. If they can I wouldn't be surprised if News Corp tried to go for BSkyB again but they would meet huge political and public opposition if they did."

STEVE MALCOLM, ANALYST, EVOLUTION SECURITIES

"I'm not surprised. I think with such universal political disapproval it would have been foolhardy to carry on at this stage.

"I think they need to get the phone hacking investigation and the judicial reviews completed, see what gets thrown out of that and regroup and if they are in position at the end of that to have another look at it then they are.

"At the moment it would be a futile pursuit given the public and political objections and disapproval to what's been going on."

(Reporting by UK bureau; Compiled by Matt Scuffham)