News Corp stake sale would benefit BSkyB

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Sky gets a “not guilty” verdict, but for James Murdoch, Ofcom’s ruling is more of a “not proven”. The watchdog says Sky is fit and proper to hold a broadcasting licence – good news for a successful business at risk of being tainted by association, and good news too for UK TV.

As for Mr Murdoch, Ofcom says his conduct with regard to News Group Newspapers repeatedly fell short of what a company director’s should be, but on the evidence available cannot finger him for wrongdoing or any cover-up.

The most damning adjective may be “ill-judged”, but for him the most worrying description of his actions – and inaction – in the face of allegations of phone hacking is surely “difficult to comprehend”. Coupled with the emphasis on what may come out of criminal proceedings and the Leveson inquiry, it suggests that Ofcom will continue its search for clues to discover why Mr Murdoch behaved as he did.

BSkyB, meanwhile, shows every sign of standing by its man, based on its knowledge of Mr Murdoch as a chief executive, chairman and non-executive director for almost a decade.

In terms of his commitment to BSkyB that looks right. After all, his personally difficult decision in April to step down as chairman to stop BSkyB being infected by the scandals at News Corp has paid off. Yet he failed to perform properly running the newspaper operations. Even though he is famously less interested in print than in programmes, that failure remains relevant to his suitability as a board member. If companies can rely on directors fulfilling their duties adequately only when they are really gripped by what they are doing, then large swathes of corporate life are heading for disorder.

The bigger question is what happens to News Corp’s 39.1 per cent stake. Its moment as a possible full owner of the UK’s most valuable commercial broadcaster has been and gone, and the Murdoch influence over BSkyB will never be greater than it is now. To avoid casting a pall over the share price of a group with such a strong emotional hold on family members, News Corp should announce plans to sell down its stake. An orderly distancing is the proper end for what was once such a close relationship.

An ouch from Ocado

It’s a good job the carrier bags used by online grocer Ocado are sturdier than investor confidence in its business model. A slowdown of sales growth in the third quarter prompted a share price drop of 4 per cent. It is now at a six-month low and less than half its value at the end of April.

As a response to a 9.9 per cent increase in gross sales, the market reaction might seem severe. But some reasons offered for the slip are unconvincing. Tim Steiner, chief executive, suggested that diamond jubilee and Olympic events disrupted normal ordering patterns, perhaps because people went abroad for longer, or stayed in the UK but ate out more. Pointing to reassuringly expensive Ocado customers, the first comment may be true, but the second is counter-intuitive given that the summer made couch potatoes of us all (or almost all of us).

Whatever its cause, the performance has revived speculation about a possible sale, no matter how much executives dismiss such chat. Both Wm Morrison and Marks and Spencer might value Ocado’s infrastructure. But Ocado’s agreement to sell Waitrose goodies means any rival acquirer would have to fork out an extra £40m or more to the grocery arm of the John Lewis Partnership if it bought more than 50 per cent of the group. Meanwhile, Waitrose itself is forcing the competitive pace, and could end up being able to buy Ocado at a bargain price.

The long-term attitudes associated with John Lewis can sometimes make it seem a softie compared with hard-nosed plcs. In putting itself in such a strong position, Waitrose shows this is not the case.

The end is nigh

It’s traditional for boards of directors to agree a deal finally and formally on a Sunday in order to announce it first thing on a Monday. This makes takeover disclosure obligations straightforward. Working through the weekend can also give a pleasing sense of importance and drama to an announcement.

But if the boards of Glencore and Xstrata have indeed in effect fixed the details of their long-planned $80bn get-together, can they please put us out of our misery and reveal all this side of the weekend? The significance of the deal for the natural resources sector means it needs no added impact from the circumstances of getting the go-ahead, while the occasionally tricky nature of their courtship has already put observers through the wringer quite enough.

alison.smith@ft.com

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