UK Indexes Drop, Brooks Resigns at News International

Bikram Pandey
15 Jul, 2011
New York City

The UK indexes edged lower and Rebekah Brooks resigned as the chief executive officer of News International. News Corp has been reeling under pressure from several UK and U.S. inquiries that may unearth details of one of the longest held practices of phone hacking perfected at the company.

[R]2:30 PM London – The UK indexes edged lower and Rebekah Brooks resigned as the chief executive officer of News International. News Corp has been reeling under pressure from several UK and U.S. inquiries that may unearth details of one of the longest held practices of phone hacking perfected at the company controlled UK tabloid.[/R]

Standard & Poor's placed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the United States of America on ""CreditWatch"" with negative implications.

Italy's lower house of parliament is due to vote later today on an €48 billion austerity budget that was approved by the Italian senate yesterday.

Rebekah Brooks, the chief executive officer of News International resigned after bowing to the sustained public and lawmakers’ pressure over the phone-hacking scandals that may have far reaching implications.

Brooks, the former editor of the UK tabloid at the time the phone of a 13-year-old murdered schoolgirl was allegedly hacked. Brooks has till today not apologized to the victims of the phone hacking scandals and for the systemic failures of news gathering techniques under her watch.

News Corp appointed Tom Mockridge, current CEO of Sky Italia, to replace Brooks immediately.

The British Commons Culture, Media and Sport Committee confirmed that Rupert Murdoch, his son James Murdoch, and Brooks will appear before the Select Committee in Parliament on July 19 to give evidence on developments relating to the hacking.

The alleged scandal forced News Corp. to withdraw its bid to acquire the remaining 60.1% stake it does not own already in satellite broadcaster British Sky Broadcasting Group Plc.

Rupert Murdoch controlled News Corp is also looking to sell most of its print publications in the UK contrary to his denial today at a press conference.

There is a growing perception in the New York media circles that Chief executive of Dow Jones, the publisher of the Wall Street Journal, Les Hinton may be ensnared in the UK inquiry for his knowledge and role in phone hacking practices at the News of the World during his tenure between 1995 and 2007 when he ran the News International.

The swift change of events at News Corp has left several long term shareholders even questioning if Rupert Murdoch is too old to run the company that has been at the forefront of several scandals in the last ten years.

In London, FTSE 100 Index declined 14.20 or 0.25% to 5,832.82 and the pound edged lower to $1.6110. For the week, the FTSE 100 Index slumped 2.63%.

BHP Acquires Petrohawk

BHP Billiton agreed to acquire U.S. oil and natural gas producer Petrohawk for $38.75 a share in an all-cash deal of $12.1 billion and a total enterprise value of approximately $15.1 billion, including the assumption of net debt.

The transaction would provide BHP Billiton with operated positions in U.S. based shale oil resource regions of the Eagle Ford and Haynesville shales, and the Permian Basin.

Gainers & Losers

Advanced Computer Software Group Plc surged 8.02% to 43.75 pence after the provider of technology solutions to the healthcare and commercial markets entered into a partnership agreement with Vodafone UK to supply a range of mobile solutions.

BP plc dipped 0.27% to 456.70 pence after the oil and gas explorer said its BP Exploration & Production Inc. unit will implement a new set of deepwater oil and gas drilling standards for its operations in the Gulf of Mexico.

Charter International plc fell 1.21% to 819 pence after the industrial tools maker rejected the revised proposal received from Melrose Plc relating to a possible 840 pence per share equity and cash offer for the company.

FirstGroup Plc soared 7.85% to 355.70 pence after the transportation firm reported like-for-like passenger revenue growth of 8.5% in the first quarter.

TUI Travel Plc declined 0.73% to 191.10 pence after the leisure travel company’s education division acquired the English Language Centre (York) Limited.