Institutional investors say prospect of deal happening soon is fading.

RUPERT Murdochs plan to take full control of the UK satellite broadcaster BSkyB has been scuppered by the political fallout from the News of The World phone-hacking scandal, experts believe.

Investors piled out of BSkyB shares Friday after the British prime minister promised an independent inquiry into what went wrong at the newspaper.Sam Hart, media analyst at broker Charles Stanley said: Murdochs plan to bid for the satellite operator has been kicked into touch.

Shareholders are discounting the possibility that this bid wont happen for the foreseeable future. Some people wonder if it will happen at all. It could take years before the various inquiries have wound up, so the deal has been pushed much further back than anyone would have guessed a week ago.

Several institutional investors agreed with Hart that the prospect of a deal happening anytime soon was fading. One said: As things stand, it would be inconceivable for such a deal to receive political clearance. There would be a huge uproar.

BSkyBs shares were down around 5 per cent at 776p yesterday morning after UK culture secretary Jeremy Hunt admitted the volume of responses to a public consultation meant the decision about whether to allow a Murdoch takeover would take some time. His view was echoed by prime minister David Cameron at a morning press conference.

Hunt said all factors would be taken into account, including whether the announcement regarding the News of The Worlds closure has any impact on the question of media plurality.News Corporation, where Murdoch is chairman, said over a year ago it wanted to buy the 61 per cent of BSkyB it did not own, but its putative offer of 700p a share was turned down by the satellite companys independent directors.Hart said: Without a bid, BSkyBs shares could fall to around 725p, which I believe is what they are roughly worth in the absence of a bid by Murdoch.Dont forget the fundamentals are strong, with BSkyB profits for the year to 30 June 2011 expected to rise from GBP779m to GBP970m.Brokers said it would be a blow if Murdoch cannot take control of BSkyB, which is viewed as a cash machine that is worth far more than the, as of today, defunct NoTW.

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