News Corp's publishing business to initiate stock buyback

Fri May 24, 2013 12:43pm EDT
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By Jennifer Saba

(Reuters) - News Corp set the distribution ratios for the spinoff of its publishing business, which may start buying back stock right away.

The board of the publishing business, which will retain the News Corp name, authorized a $500 million stock repurchase program, the company said on Friday.

The stock repurchase may shed light for analysts and investors who want to know how the new News Corp will use the $2.6 billion in cash it will have when the spinoff takes place. That is expected to occur on June 28.

Chairman Rupert Murdoch and Chief Executive Officer Robert Thomson will give more details about the company at a conference on May 28.

The board of the existing News Corp has now formally approved the split-up of the company's publishing business from its entertainment operations. Current News Corp stakeholders who own four shares of Class A or Class B common stock will receive one share of new News Corp's Class A or Class B common stock.

To prevent hostile takeovers, News Corp put in place a poison pill provision for one year after the split. It will be triggered if someone acquires more than 15 percent of the stock of either company.

News Corp has a history of potential takeovers. In 2004, Liberty Media Corp's John Malone had quietly snapped up a 20 percent voting stake in the company. The move prompted Murdoch to swap his stake in DirecTV and other assets for Malone's shares in News Corp.

The new News Corp will be an independent publicly traded company.   Continued...

Chairman and CEO of News Corporation Rupert Murdoch talks next to Laurene Powell Jobs (R), founder of Emerson Collective and widow of the late Apple founder Steve Jobs, as they take part in a panel discussion titled "Immigration Strategy for the Borderless Economy" at the Milken Institute Global Conference in Beverly Hills, California April 29, 2013. REUTERS/Gus Ruelas