BSkyB Investors Doubt NewsCorp Pledges

21 October 2005

Shareholders in UK satellite broadcaster BSkyB have failed to make progress in their talks with media giant News Corporation over its intentions towards the company.

Major investors in Sky are threatening a rebellion over buyback proposals which could increase NewsCorp's voting stake above the 37.14% cap it originally set.

NewsCorp, chaired by Rupert Murdoch, is currently facing legal action by furious Australian investors over the extension of its 'poison pill' defence against the feared predations of cable pioneer John Malone's Liberty Media.

The stratagem was put in place last November when Malone increased his voting stake in NewsCorp to 18%; when talks with him broke down, it was extended for up to two years .

As one shareholder source says: "If NewsCorp can renege on a promise signed with shareholders which we thought was pretty watertight ... why should we believe they will honor the agreement between NewsCorp and BSkyB which after all are chaired by the same person?"

Sparks could fly at Sky's annual meeting in London early next month unless assurances are offered and accepted.

Data sourced from BrandRepublic (UK) and; additional content by WARC staff