BSkyB Faces $4.2 Billion Payout Quandary on Murdoch Scandal

Indonesia stock info ; BSkyB Faces $4.2 Billion Payout Quandary on Murdoch Scandal ; British Sky Broadcasting Group Plc (BSY)’s board of directors faces a dilemma over a potential 2.6 billion- pound ($4.2 billion) payout to shareholders that would also go to Rupert Murdoch’s News Corp. (NWSA), the company whose bid for BSkyB collapsed because of a phone-hacking scandal.

The 14-person board, chaired by son James Murdoch, will on July 28 consider a one-time dividend to investors, said a person familiar with the matter, who asked not to be named because the meeting is private. BSkyB stock dropped 17 percent in seven days before the hacking allegations forced News Corp. to shelve its offer for full control of the U.K. pay-TV company. News Corp. is BSkyB’s biggest shareholder with a 39 percent stake.

“They’ve ended up in a position where they can’t do the right thing, because that involves doing the wrong thing by some people,” said Chris Bryant, the opposition Labour lawmaker who is suing News International, the News Corp. unit that published the News of the World, the newspaper that was closed down this month as the phone-hacking crisis engulfed Murdoch’s media empire.

BSkyB shares soared as high as 850 pence before the Guardian reported on July 4 that News of the World employees intercepted murder victim Milly Dowler’s voice mails in 2002.

1,000 Pence

Closing at 739 pence in London yesterday, the stock was still 13 percent below that level and 26 percent less than the 1,000 pence Citigroup Inc. analysts said in March News Corp. might eventually pay. New York-based News Corp. had bid 700 pence, or 7.8 billion pounds in total, for the remaining 61 percent stake.

BSkyB slid 11 pence, or 1.5 percent, to 728 pence as of 8:51 a.m. in London.

BSkyB declined to comment on the board meeting or any possible dividend plan. Alice Macandrew, a News Corp. spokeswoman in London, declined to comment when asked about News Corp.’s position on a BSkyB dividend.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

London-based BSkyB could pay 80 pence a share in special dividends using its own cash, said Lorna Tilbian, an analyst at Numis Securities, who recommends buying BSkyB shares. The dividend could reach as much as 150 pence if the board opts to increase the ratio of its net debt to earnings before interest, taxes, depreciation and amortization to two times, she said.

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