A tenth of BSkyB shareholders to oppose Murdoch's share buyback

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The Independent Online

One tenth of BSkyB shareholders will this week vote against controversial plans, which they fear will see Rupert Murdoch strengthen his control over the broadcaster.

One tenth of BSkyB shareholders will this week vote against controversial plans, which they fear will see Rupert Murdoch strengthen his control over the broadcaster.

Analysts are also warning that BSkyB will say subscriber growth has fallen when it reports first-quarter results this week. The City expects the company to announce around 50,000 new digital subscribers for the three months, down from 81,000 for the previous quarter, which would take it to just over 7.4 million subscribers.

UK shareholders Insight Investment, the asset management arm of HBOS, Standard Life and M&G, the fund manager owned by Prudential, will lead the symbolic opposition to the proposed share buyback.

Backing from BSkyB's largest US shareholders, believed to include Franklin Resources and Janus Capital, means the company will get the simple majority necessary from independent shareholders to press ahead with the plans. BSkyB wants to buy back 5 per cent of its shares to reward investors and boost its flagging share price.

News Corporation, which is controlled by Rupert Murdoch, father of BSkyB chief executive James, already owns 35 per cent of the pay-television broadcaster. But because News Corp does not want to tender its shares, its stake would automatically rise to 37 per cent after the buyback.

To get the go-ahead, shareholders must approve a waiver of Rule 9 of the Takeover Code, which forces investors with more than 30 per cent of a company to launch a full offer.

Some shareholders - mostly UK-based - are concerned about the creeping control by News Corp and will vote against the special resolutions at Friday's shareholder meeting.

The company has refused shareholder requests to reward them instead through a special dividend, blaming insufficient distributable reserves to make the payment. The company has presented the buyback as a "take it or leave it" offer.

The National Association of Pension Funds recommended that shareholders vote in favour, but acknowledged concerns over the buyback.

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