News Corp has announced plans to use more cash reserves to double its share buyback scheme to US$10bn, suggesting any renewed takeover bid for UK-based satellite broadcaster BSkyB is still a long way off.
Posting Q3 net profit up 47% on the year to…
News Corp has announced plans to use more cash reserves to double its share buyback scheme to US$10bn, suggesting any renewed takeover bid for UK-based satellite broadcaster BSkyB is still a long way off.
Posting Q3 net profit up 47% on the year to US$937m, on revenue up 2% to US$8.4bn, the group said it expects to acquire the additional US$5bn of Class A common stock by 30 June 2013.
The decision is being seen as a further step away from the group revisiting last year’s aborted US$12bn bid to acquire the 61% of BSkyB that it does not already own.
News Corp COO Chase Carey told investors that the group was “comfortable staying the course with BSkyB for a long time”.
However, British media regulator Ofcom is currently reviewing News Corp’s existing 39% stake in the DTH firm to decide whether it is a ‘fit and proper’ holder of broadcasting licences. The investigation comes in the wake of the widely-reported phone hacking scandal surrounding News Corp, and its UK-based newspapers, which first hit headlines last year. It was the negative press generated by this ongoing scandal that ultimately led to News Corp withdrawing its BSkyB takeover bid in July 2011.
Carey played down speculation that it could sell down its existing BSkyB stake as the phone hacking scandal continues to impact its operations, leading to the resignation of a number of high-profile executives.
“We have no expectation to sell the Sky stake at this time,” he said. “Our interest is in being a shareholder that helps the business reach its potential.”
James Murdoch, whose father Rupert Murdoch is CEO and chairman of News Corp, resigned as chairman of BSkyB earlier this year, although he remains as a non-executive director on the DTH group’s board.
Carey said the group had not considered removing James Murdoch from further board positions at either News Corp or BSkyB.
