News Corp. approves $5-billion stock buyback
With its stock price being hammered by investors in the wake of the phone-hacking scandal that led to the closing of its News of the World tabloid, Rupert Murdoch's News Corp. approved a stock repurchase program totaling $5 billion.
The move comes after four days of stock declines and a loss of more than $7 billion in market value to News Corp., a global media conglomerate with annual revenues of close to $33 billion. News Corp. stock closed at $16.10 Monday, a six-month low. In trading early Tuesday, the stock was up slightly to $16.41.
Besides the black eye News Corp.'s reputation has taken for allegations of massive phone hacking by the News of the World into the voice mails of not only celebrities and the royal family, but victims of crime as well, the debacle has jeopardized the company's plans to acquire control of British satellite broadcasting giant BSkyB.
The deal to buy the 60% of BSkyB that it doesn't already own for more than $12 billion has come under increasing scrutiny in the last few weeks after seeming poised for approval by British regulators. On Monday, News Corp. made moves that would invite more regulatory scrutiny of its ambitions to acquire all of BSkyB in the hopes of building goodwill with regulators.
The stock buyback actually increases an existing program that still had $1.8 billion remaining under the current plan.
While News Corp. continues to try to contain the fire engulfing its British operations, the mess has given its critics new ammunition to attack the company in the U.S. and to demand that regulators and lawmakers investigate the media giant.
-- Joe Flint
Photo: Rupert Murdoch. Credit: Oli Scarff /Getty Images