LOS ANGELES (AP) — increased News Corp. stock on Wednesday after the media company said it is dropping its $ 12 billion bid for British Sky Broadcasting. Investors returned their focus to the company's balance ballooning, with hopes that it will spread the ownership of all of its U.K. newspapers when the company is trying to contain damage from a phone-hacking scandal.
Shares rose 67 cents, or 4 percent, to $ 16.02 during afternoon trading after the company's Deputy chief operating officer, Chase Carey, is called by the bid. Carey said "it has become apparent that it is too difficult to make progress in this climate."
Claims that News World reporters hacked into mobile phone voice messages by celebrities, politicians and victims caused the Rupert Murdoch-controlled conglomerate-shutter 168 years old tabloid.
But that did not contain the crisis. On Monday referred to the British Government News Corp. bid for British Sky Broadcasting Britain's competition authorities, where it would have been bound for months. Former Prime minister Gordon Brown also accused other News Corp newspapers of criminal hacking. That threatens to envelop the Sun and The Sunday Times. The Sun has denied any wrongdoing.
Nomura analyst Michael Nathanson said in an analyst note as investors shifted their view back to News Corp. strong fundamental underpinnings, residing in its U.S. cable channels such as Fox News, its movie studio 20th Century Fox and United States broadcast network Fox.
Nathanson said he saw upward shares with a target price of $ 21. He said that it was time for the company to pull out of the U.K. newspaper business. All News Corp. newspapers, including the U.K. newspapers and The Wall Street Journal, represented less than 3% of its 1.06 billion dollars in operating profit in the last quarter.
"Perhaps this rebuke will force News Corp. to reconsider its ownership of U.K. newspapers," he said in the note. "We hope this is a turning point for the allocation of the company's strategy and asset ownership of very inconsistent newspaper assets has forced the abolition of a strategically important asset.
In March, had News Corp single 11.8 billion dollars in cash in preparation for the BSkyB deal. Objects the investors ' concern over what it would do with cash if the deal was delayed or called, the company decided Tuesday to increase the amount of shares it buys back from the market to 5 billion dollars over the next 12 months, from a planned 1.8 billion dollars.
Now that the deal is completely, seeking investors for more insight into new ways the company will spend their money.
"We see now, investors ' focus returned to the potential distribution of cash, as we see nearing 15 billion dollars," said Standard and poor's Equity Analyst Tuna Amobi, maintained his "buy" rating on the shares.
As far as BSkyB, in which News Corp still owns 39 percent of the shares, the shares closed 2 percent higher at 705 pence ($ 11.35), after trading around 680 pence after News Corp said it do their bidding.
In the immediate aftermath of the statement shares Tanked at a low of 665 pence, but the knee-jerk sell-off was short-lived.
Speculators hedge funds – which was open to budgetary outcomes from the prospect of a better News Corp offer – is pull out. At the same time, "said analyst new investors looking to buy up what has become relatively inexpensive material for a company that is highly profitable.
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