Newspaper article The Evening Standard (London, England)

BSkyB under Pressure for [Pounds Sterling]2bn Return to Investors

Newspaper article The Evening Standard (London, England)

BSkyB under Pressure for [Pounds Sterling]2bn Return to Investors

Article excerpt

Byline: Gideon Spanier

BSKYB's board today came under pressure to pay a one-off dividend of up to [pounds sterling]2 billion to compensate investors for the failed News Corp takeover while chairman James Murdoch faced questions about whether he should quit. Broker Nomura suggested Sky could pay "a special dividend" of as much as 120p-130p because the pay-TV giant is well capitalised. "We believe holders should now press the directors of BSkyB to do this," said a Nomura analysts' note.

The board of BSkyB has not met, even by telephone, in the past 10 days to discuss the turmoil surrounding the company, which led to News Corp, its 39% shareholder, pulling its takeover bid yesterday. It is understood the directors are unlikely to meet until just before July 29 when they must approve full-year results.

Sources indicated a special dividend and the position of James Murdoch, BSkyB chairman since 2007, will be on the agenda at the board meeting.

"They are bound to talk about James's position in terms of the corporate governance process," admitted a source close to the company. Shareholder lobby group Pensions & Investments Research Consultants said: "It is time for the board to review whether BSkyB and its shareholders would benefit from a new, independent chair."

There is also growing political anger in America about the scale of phonehacking at News Corp, where James Murdoch sits as a board director.

Several BSkyB shareholders, including Franklin Templeton and Capital Research, are also based in the US.

Sky's non-executive directors, who are led by deputy chairman Nicholas Ferguson, are in the majority.

When News Corp first made its takeover approach in June 2010, the board of Sky agreed James Murdoch would not be involved in any governance decisions where there was a potential conflict of interest.

An insider said: "The issue of James stepping down was raised a year ago and he didn't want to and News Corp didn't want him to. …

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