THE NEWS WRAP: Murdoch abandons BSkyB bid

Rupert Murdoch has pulled the plug on the attempted takeover of UK broadcaster BSkyB in the wake of the phone hacking scandal that has engulfed his media empire.

US-based News Corporation said that it was abandoning plans to take complete control of the profitable network and will retain its 39% stake.

The move follows the UK government’s decision to back an opposition motion calling on Murdoch to drop the bid while two separate inquiries look at allegations of widespread phone hacking by the News of the World, which has since been closed, and other News International newspapers.

Meanwhile, News Ltd, the Australian arm of Murdoch’s media group, has announced that it will conduct a review of payments made to freelancers.

Entrepreneurs buy Tassie woodchip mill

Two prominent entrepreneurs have bought a controversial woodchip mill on the east coast of Tasmania for $10 million.

Graeme Wood, founder of wotif.com, and Jan Cameron, founder of Kathmandu, paid under the $15 million logging company Gunns was looking for the site. The duo said the long-term plan for the mill was to turn it into an eco-tourism destination.

David Jones downgrades profit

Shares in retail chain David Jones dropped sharply this morning after it announced a significant downgrade in its sales and profit forecast.

The retailer’s managing director Paul Zahra said that “dramatic and rapid deterioration in trading conditions” during the 2011 financial year will see its profit slump between 15% and 20% in the second half compared to the first half.

Overnight

The Dow Jones Industrial Average rose 44.73 points to 12,491.61. The Australian dollar was up to 107.39 US cents.