Phone hacking scandal: News Corp extends buyback plan as UK government urges it drop BSkyB bid

13th July 2011

The Financial Times reported that the share buy back had been raised from $1.8bn to $5bn, as part of  "Rupert Murdoch's latest dramatic response to a crisis that has weighed heavily on the media group's shares".

Even so the buy back will not dent News Corp's ability to afford the 61 per cent of BSkyB it does not already own, the FT said.

The expanded buy-back programme will start on August 15, when a blackout period around quarterly earnings reporting ends.

News Corp shares, which suffered their biggest daily loss since April 2009 on Monday, opened up as much as 3.5 per cent in New York on Tuesday to $16.57, before falling back later in the day and closing down 0.84 per cent at $15.35.

The buy back announcement was followed by demands from one US senator for an inquiry into News Corp, and indication that the scandal that hit the media organisation's UK newspapers and led to the closure of the News of the World could spread to the US.

Jay Rockefeller, head of the powerful Senate commerce committee said the US should investigate whether News Corp papers had broken US laws following reports that victims of the September 11 attacks may have had their phones hacked by detectives working for the News of the World.

The BBC News website reported that in a rare show of unity, the Conservative and Liberal Democrat parties have agreed to ato back a Labour motion urging Rupert Murdoch to withdraw his bid for BSkyB.

Labour says the unanimous support of MPs for News Corporation to pull out of a bid for the broadcaster will send a "clear message" to Mr Murdoch.

It comes after Mr Cameron met Deputy Prime Minister Nick Clegg and Labour leader Ed Miliband at Downing Street to discuss the hacking scandal on Tuesday.

Metropolitan Police Commissioner Sir Paul Stephenson is believed to have updated the three men on the current state of the police inquiry into hacking claims when he visited No 10.

Read more:

Investors vent their anger against Murdoch's News Corp empire

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