Sky's $1bn bid to placate City

 
Steve Dinneen
Follow Steve
JAMES Murdoch survived a boardroom debate about his chairmanship of BSkyB yesterday as the satellite broadcaster agreed a share buy-back plan of up to $1bn (£611.2m), which will be unveiled today.

It is the first time in BSkyB’s history that its dominant shareholder, the Murdoch-controlled News Corporation, has agreed to sell shares in a buy-back to make sure that its stake doesn’t rise above the current 39 per cent. In a previous buy-back News Corp decided against selling shares to take its stake up from 36 per cent, inviting criticism about creeping control.

Sources said the board engaged in a “vigorous discussion” about James Murdoch’s continuing role as chairman at Sky but his position had already been secured ahead of the meeting when senior independent director Nick Ferguson intimated his support.

This is despite a member of the committee that grilled News Corp executives last week calling for James Murdoch to be recalled for further questioning over the hacking scandal.

Tom Watson, a Labour MP, believes contradictory statements made to the committee need to be clarified, especially those relating to an email supposedly containing evidence that phone hacking at the paper was not contained to a single rogue reporter.

Former News of the World editor Colin Myler and the paper’s former legal manager Tom Crone could also be recalled, Watson said.

The former Labour minister told Sky News: “News International have had to be forced at every point to admit things have happened ... and generally [they’re] having to have things dragged out of them.”

Analysts said that News Corporation’s agreement to a share buy-back, including its commitment to sell shares itself, would make a lot of sense.

“A buy-back, with News selling pari passu, is the best outcome for all shareholders,” said Lorna Tilbian of Numis Securities. BSkyB shares have been under pressure during the phone-hacking scandal, which has resulted in News having to drop its bid to gain full control of the company.

Pressure on News Corp rose again yesterday after it was alleged that News of the World journalists hacked the phone of Sara Payne, the mother of murdered schoolgirl Sarah.

Meanwhile, Lord Leveson yesterday held the first meeting in his inquiry into media ethics and the relationship between journalists and the police.