BSkyB spends $1.6 bln to calm hacked off investors
BSkyB will spend 1 billion pounds ($1.6 billion) to placate investors who lost out after News Corp bowed to public fury over a hacking scandal and dropped a bid to take full control of the satellite broadcaster.business Updated: Jul 29, 2011 12:16 IST
BSkyB will spend 1 billion pounds ($1.6 billion) to placate investors who lost out after News Corp bowed to public fury over a hacking scandal and dropped a bid to take full control of the satellite broadcaster.
BSkyB, whose board on Thursday voted unanimously to keep News Corp boss Rupert Murdoch's son James as its chairman, said it would return 750 million pounds to investors with a share buy-back and a further 253 million pounds via a hike in its dividend.
Shares in BSkyB have fallen over 15% since a long-simmering phone hacking case erupted this month, derailing the planned buyout, shutting down Murdoch's 168-year-old News of the World newspaper, ending the careers of two top policemen and rocking the British political establishment.
News Corp stock, which already owns 39% of BSkyB, have fallen 10% on fears of reputational damage to the wider group, wiping billions of dollars off its market value and shaking Murdoch senior's grip on the media group. News Corp's stake will remain unchanged after the buy-back.
Allegations of hacking at News Corp's British newspapers, and in particular reports journalists accessed the voicemails of murder victims, have triggered a judicial inquiry and calls from some politicians to cap Murdoch's media ownership, making any renewed approach for BSkyB a distant prospect.
"While Sky is not immune to tougher economic conditions, we have continued to see good demand across our product portfolio," BSkyB chief executive Jeremy Darroch said in a statement announcing the company's full year results on Friday.