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News Corp shares in Australia tumble as Murdoch's hacking scandal deepens [AlArabiya.net (United Arab Emirates)](AlArabiya.net (United Arab Emirates) Via Acquire Media NewsEdge) News Corp's Australian shares fell more than 7 percent to a two-year low as the phone hacking scandal fallout worsened, while investors worried that a $2 billion bid for an Australian pay-tv firm involving News Corp could be derailed by political intervention. Investors dumped News Corp shares in heavy volumes on Monday rather than try to anticipate how investigations into the scandal may unfold. "I think people would rather be cautious and mark it down rather than find a reason to defend it," said Invesco senior investment manager Jackson Leung in Melbourne. Invesco is News Corp's second-largest institutional shareholder with a 1.68 percent stake, according to Thomson Reuters data. "I would rather sit and wait to see if there are any more developments on it," Mr. Leung said. Shares in News Corp takeover target pay-TV firm Austar also fell on worries the deal may not proceed after the furor in Britain forced News to drop a $12 billion plan to buy all of highly profitable broadcaster BSkyB . Austar has agreed to a $2 billion-plus takeover offer from its bigger rival Foxtel, which is owned by News Corp's News Ltd division, billionaire James Packer's Consolidated Media Holdings, and telecoms firm Telstra. The Australian government last week said it may review media laws and ownership, following pressure from the influential Greens party. Rupert Murdoch's News Ltd dominates the Australian newspaper industry, commanding nearly three-quarters of daily metropolitan newspaper circulation, and the UK scandal has riveted attention in his homeland. Mr. Murdoch, who now has United States citizenship, started his global media empire in Adelaide when he inherited the now defunct Adelaide News from his father, Sir Keith Murdoch. He owns 150 national, capital city and suburban news brands in Australia, which include mass circulation daily tabloids in Sydney (Daily Telegraph) and Melbourne (Sun Herald) and the national daily, The Australian. Austar last traded down 3.8 percent while Consolidated Media fell 3.4 percent at 0445 GMT, against a flat broader market, reflecting investor concerns on the future of the deal. Still, the Austar and Foxtel camps and banking sources familiar with the deal said the offer was on track and did not expect it to be derailed because Foxtel is only 25 percent owned by News Corp. "This has long been a transaction with a compelling logic to it and is in the best interests of shareholders. We will continue to keep the market informed as and when appropriate," a spokeswoman for Austar said. Australia's competition watchdog is due to rule on the bid for Austar on July 21. Mr. Murdoch, through BSkyB, also has an interest in 24-hour news channel Sky News Australia, which is 33 percent-owned by BSkyB. Sky News TV in Australia is in a battle with the government-owned Australian Broadcasting Corp to run the country's overseas TV network - Australia Network. On Sunday, detectives arrested Rebekah Brooks, former head of News Corp's British newspaper arm, on suspicion of intercepting communications and corruption. Sir Paul Stephenson, London's police commissioner, quit in the face of allegations that police officers had accepted money from the paper and had not done enough to investigate hacking charges that surfaced as far back as 2005. News Corp's Australian shares have dived 18 percent, or nearly A$3 ($3.17), this month as the News of the World hacking scandal engulfed News Corp executives. On Monday, the shares fell 7.6 percent to as low as A$13.65, their weakest since July 2009, and also a 7.4 percent discount to News Corp's last US close, implying that $3 billion of market capitalization would be wiped out when US trade resumes. Volume was three times the average. A News Ltd spokesman in Sydney declined to comment on the share move, saying any comment would have to come out of New York. "There's a lot of sentiment and emotion driving the stock," said Simon Burge, chief investment officer at ATI Asset Management in Sydney, which holds News Corp shares. "From an earnings point of view, News of the World was less than 1 percent of earnings but this has catapulted to something greater and it is hard to quantify." It was the biggest one-day slide for the shares since November 2008. Provided by Syndigate.info an Albawaba.com company (c) 2011 All rights reserved. Albawaba.com |