News Corp ups share buy back to $5bn

 
City A.M. Reporter
News Corp plans to buy back $5bn (£3bn) in stock over the next 12 months as the media company tries to contain the telephone hacking scandal which has sent its share price down about 14 per cent overall.

Rupert Murdoch's media conglomerate responded to investor pressure to support the stock. Shares rose more than two per cent on the news of the buyback.

The company, which is home to the Fox television network, the Wall Street Journal and a clutch of British newspapers at the centre of the phone hacking scandal, said on Tuesday it would increase the program of about $1.8bn remaining under the company's current buyback to $5bn. That is about 16 percent of the company's market capitalisation.

The program includes class A and class B stock.

Investors during the past week suggested that News Corp should buy back shares rather than pursue its $14 billion acquisition of satellite operator BSkyB (BSY.L). The phone hacking scandal, which began at the now-defunct News of the World newspaper, has thrown the deal's success into doubt.

"This is clearly a positive. It's accretive to earnings, and shareholders had been hoping for this for some time," said Evercore Partners analyst Alan Gould. "It's a step in the right direction, and the stock should hold up relative to the market."