News Corp. Pulls BSkyB Bid

NEW YORK ( TheStreet) -- News Corp. ( NWSA) withdrew its bid for British Sky Media on the urging of government officials, according to Sky News.

This comes as News Corp.'s now shuttered News of the World tabloid is under investigation for phone hacking and the media conglomerates other entities are also being scrutinized.

Chase Carey, deputy chairman, president and chief operating officer, News Corp., commented: "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."

Shares of News Corp. gained 2% to $15.66 following the announcement.

Phone-hacking allegations have now moved beyond the U.K., with Prime Minister David Cameron saying it is also being investigated as to whether News Corp. tried to illegally access the phone numbers of 9/11 victims.

But regardless of the scandal, Citigroup added News Corp. to its list of Top Picks, saying it sees "few (if any) scenarios that would result in permanent damage of News Corp.'s existing assets."

-- Reported by Jeanine Poggi in New York.

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