Broadcaster moves to appease investors as board offers full support to chairman James Murdoch
BSkyB will return around £1 bn ($1.6 bn) to shareholders following the collapse of its sale to News Corp.
The broadcaster, which today announced strong full-year results, said it will launch a £750 mn share buyback and also increased its full-year dividend by 20 percent, taking the final dividend payment to £253 mn.
Investors, who lost out when News Corp pulled its takeover of BSkyB earlier this month, had called for the company to take on additional leverage and return more cash to shareholders.
Under the terms of the buyback, News Corp’s 39 percent stake in BSkyB will not rise. Shareholders will be asked to approve the share buyback program at BSkyB’s annual meeting in November.
News Corp pulled its bid for the remaining 61 percent of BSkyB after allegations of widespread phone hacking at one of News Corp’s UK tabloid newspapers.
Jeremy Darroch, CEO of BSkyB, said today that the board unanimously backs chairman James Murdoch, who also chairs News Corp’s UK operations and has been under pressure over his handling of the phone hacking scandal.
‘There was a long discussion – as you’d expect – at the board yesterday around governance, including the role of chairman, and the outcome was that the board was unanimous in its support of James as chairman,’ said Darroch on BBC Radio 4’s Today program this morning.
Pushed on whether that could change if it was found Murdoch knew more about phone hacking than he admits, Darroch added: ‘One of the core jobs of the board is to keep an eye on external events. It will do that across the whole range of what the company does.’
