Phone-Hacking Scandal Costs Hedge Funds Millions [Headlines]
Hedge funds that hoped to make a killing on BSkyB takeover instead face huge losses now that bid has been withdrawn.
Hedge funds have suffered one of their worst setbacks in years, losing tens of millions of pounds by betting that Rupert Murdoch’s News Corporation was on the verge of taking full control of BSkyB. Short-term speculators expected to make a killing by investing in a company viewed as a prime bid target, but instead have seen shares in the satellite television company plunge. With News Corp today bowing to political pressure by abandoning its plan to take full control of BSkyB, more selling is possible in the days ahead. Brokers estimate another 100m BSkyB shares are in the hands of “arbs,” funds that specialise in opportunities presented by mergers and acquisitions. Guardian