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Rupert Murdoch's News Corp has been attempting to acquire the satellite broadcaster, but this move now looks in danger in the wake of the News of the World phone hacking case.
Thomas Singlehurst, an analyst at Citigroup, said the takeover bid may have been dealt a major blow by the scandal, which resulted in Murdoch axing the newspaper on Sunday.
Ofcom, the UK's telecoms and media watchdog, has since been asked by the government to consider whether or not the acquisition is credible.
"A potential BSkyB/News Corp merger no longer looks as certain as we thought it was a week ago," he explained in a note to investors.
According to MarketWatch, the development resulted in the FTSE 100 share index falling 61.42 points, or 0.1 per cent, to end the day on 5,929.16, although it still outperformed the majority of European bourses.
Posted by Greg Secker
