News Corporation today said it planned to buy back up to $3 billion of its stock in response to calls from shareholders to put its cash to work.
The share repurchase, expected to take place over the next two years, comes as the company's stock is down more than 10 per cent since the start of the year. After the announcement, shares rose 17 cents to $17.05 on the New York Stock Exchange.
Rupert Murdoch, chairman and chief executive, said last month the movie studio and television conglomerate had "various alternative ways to deal" with its $6 billion in cash.
At the time, however, Mr Murdoch suggested that the company would resolve lingering issues with Liberty Media Corporation before any decisions about how to use its cash were announced.
Investors have worried about Liberty's plans ever since its chairman, John Malone, quietly accumulated an 18 per cent voting stake in News Corp. last year, stoking fears of a takeover.
Analysts have said News Corp would likely try to find a tax-efficient way to buy Liberty's stake or create a complicated transaction to diminish Liberty's voting power.
As for its buyback, News Corp said the purchases would be made through open market transactions. They will also be divided about equally between its Class B common stock and its Class A common stock.