Sat, Jul 30, 2011 - Page 10 News List

BSkyB to fork out US$1.6bn to soothe investors

DISTRIBUTION:Aside from buying back £750 million in shares, BSkyB is adding £253 million to its dividends, raising the full-year payout by 20 percent

Reuters, LONDON

BSkyB will spend £1 billion (US$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, will return £750 million to investors with a share buyback and a further £253 million via a final dividend of £0.1454 a share.

The dividend lifts its payout for the full year by 20 percent to £0.2328 per share, creating a total dividend pot of more than £400 million of which News Corp, as 39 percent shareholder in BSkyB, will get almost £160 million.

HACKING SCANDAL

Shares in BSkyB have fallen more than 15 percent since a long-simmering phone hacking case erupted this month, derailing a planned buyout by News Corp, 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 has seen its stock plunge 10 percent 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 BSkyB stake will not change after the buyback.

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.

STRONG REVENUES

BSkyB’s appeal to News Corp was highlighted as the broadcaster yesterday unveiled a slightly better-than-expected 16 percent jump in full-year revenue to almost £6.6 billion and a 23 percent rise in operating profit to £1.07 billion.

Analysts had expected revenues to come in at £6.45 billion according to the average forecast provided by Thomson Reuters I/B/E/S, while operating profit had been seen at £1.06 billion.

“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.

In a sign that its subscribers may be feeling the pinch as the British economic recovery struggles to find its footing, the company said its closely watched average revenue per user dipped to £539 at the end of the fourth quarter from a rate of £544 in the third quarter.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top