Trust me

18 October 2004 By Fiona Maharg-Bravo

Investors fear a proposed buyback would allow News Corp to take creeping control of the UK pay television group. Those fears look overdone. But it comes down to whether investors trust the Murdochs. And after last year s events, it is too early to be asking for a trust me" vote.

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BSkyB plans to ask shareholders' permission to buy back 5% of its shares at the annual meeting on 12 November. The buyback would require shareholders to waive Rule 9 of the Takeover Code, which states that a shareholder owning more than 30% of the company must launch a bid for the whole if it increases its stake.

Sky needs the waiver because News Corp, controlled by Rupert Murdoch, owns 35% of Sky. The stake would rise to 37% after the buyback. Some shareholders oppose the resolution on the grounds that it constitutes creeping control of the company.

News Corp is not allowed to vote its shares. All that is required is a simple majority of the rest of the shareholder base.

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