Shares in News Corp shares plummeting, but nowhere more so than on the Australian Stock Exchange (ASX), where News Corp shares are taking a daily beating as the phone hacking scandal continues to damage the company's image.
On Monday Morning trading, the Australian Stock Exchange is listing news Corp shares down 5.69% per cent @ A$13.93, on top of the shares having lost more than 11% last week. (UPDATE: shares were down more than 7% throughout the day, but ended down 4.1%)
And news from Down Under is that the event is effecting another News Corp acquisition deal in the works, the $2+ billion deal for Foxtel to take over it's rival, Austar, a pay-tv firm.
News Corp shares slide as hacking scandal deepens
News Corp's (NWS.AX) Australian shares sank to a two-year low on Monday as the UK phone hacking scandal fallout worsened, raising concerns that a $2 billion bid for an Australian pay-tv firm involving News Corp could be derailed by political intervention.
Investors sent News Corp shares down as much as 7 percent in heavy volume after Rebekah Brooks, the former head of the company's UK paper business, was arrested on Sunday and top policeman Paul Stephenson quit over the scandal.
Shares in a News Corp takeover target, pay-tv firm Austar (AUN.AX), 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 (BSY.L).
Austar has agreed to a $2 billion-plus takeover offer from its bigger rival Foxtel, which is owned by News Corp's (NWSA.O) News Ltd division, billionaire James Packer's Consolidated Media Holdings (CMJ.AX), and telecoms firm Telstra (TLS.AX).
http://www.reuters.com/...
The Australian Green Party is calling for a review of media ownership regulations, but the government has refused to consider action.
Federal Government dismisses need for overhaul of media laws
AUSTRALIA'S media laws and privacy protections do not need a review, the Federal Government has declared.
Attorney-General Robert McClelland said calls for tighter regulation and stricter ownership limits, which were sparked by ethical and criminal breaches in Britain, would not be pursued.
He said the Federal Government was not concerned because there was no evidence of similar problems here.
Murdoch's News Ltd controls close to three-quarters of the Australian newspaper industry and Murdoch owns 150 newspapers across Australia.
All this and more of this morning's developments on the other side..
Driving the plunge is the ongoing scandal surrounding Australian-born Murdoch's media empire, which has continued to gain momentum, and bodies, with the arrest of Rebekah Brooks, the former head of Murdoch's British newspaper wing.
Brooks was questioned over a 12 hour period on Sunday on allegations she conspired to intercept communications and that, while editor of the now-defunct News of the World, the paper paid police for information.
In further developments, Britain's top police officer, Commissioner of the Metropolitan police Sir Paul Stephenson, resigned due to speculation about his links to Murdoch's empire and the force's botched investigation into phone hacking at the News of the World.
Murdoch Himself has been called to testify before a full public inquiry examining phone hacking and links between politicians and the press announced by Prime Minister David Cameron. Murdoch's son James, and Brooks, have also been summoned. Prime Minister David Cameron has warned that anyone implicated could be barred from Britain's media environment.
SHARES OFF 18 PERCENT IN JULY
News Corp's Australian shares have dived 18 percent, or nearly A$3, this month as the News of the World hacking scandal engulfed News Corp executives.
On Monday, the shares fell 7.6 percent to an intraday low of A$13.65, the weakest since July 2009, and also a 7.4 percent discount to News Corp's (NWSA.O) last U.S. close, implying a $3 billion drop of market capitalization at that level.
http://www.reuters.com/...
Add to that this news from Bloomberg (NOTE: go NOW and read the full Blooomberg article! http://www.bloomberg.com/...):
News Corp. at 50% Discount Shows Diminishing Murdoch
What’s News Corp. (NWSA) really worth? At least 50 percent more without Rupert Murdoch.
The company, which owns the Fox TV networks and the Wall Street Journal, has fallen 13 percent since allegations surfaced that one of Murdoch’s tabloid newspapers hacked into the voicemail of a murdered schoolgirl, wiping out $6 billion from News Corp. (NWS)’s market capitalization in less than two weeks. The $41 billion company now sells for less versus earnings than any of its closest rivals, according to data compiled by Bloomberg.
By valuing each of News Corp.’s businesses separately, the New York-based media conglomerate would be worth $62 billion to $79 billion, estimates from Barclays Plc and Gabelli & Co. show, indicating News Corp. trades at an almost 50 percent discount to its units. Murdoch, 80, is facing increasing scrutiny over his management of News Corp. after the phone-hacking revelations forced him to abandon a takeover of British Sky Broadcasting Group Plc (BSY) and deepened a slump that’s left shareholders with a 16 percent loss in the past five years even as its rivals gained.
“There’s just sort of this generic Murdoch discount, which encompasses the concern that he will make decisions that are not consistent with other shareholder interests,” said Michael Morris, an analyst at Davenport & Co. in Richmond, Virginia. “The sum of the parts on News Corp. is huge compared with where the stock trades.”
Based on Morris’s own sum-of-the-parts analysis, News Corp. is worth about $25 a share, 60 percent higher than the company’s closing price of $15.64 last week.
Myspace, Shine Group
Since completing the deal in December 2007, News Corp. has lost 21 percent, including dividends, while media companies in the Standard & Poor’s 500 Index gained 20 percent. New York- based Time Warner Inc. (TWX), owner of HBO and TNT, returned 12 percent in that span, and Walt Disney Co. (DIS), the Burbank, California-based owner of the ABC network, rose 24 percent.
News Corp. also exited its 41 percent stake in Gemstar-TV Guide International Inc. in December 2007 after $6 billion in writedowns, and agreed last month to unload MySpace for $35 million, a fraction of the $580 million it spent six years ago.
Murdoch’s purchase of his daughter’s TV production company, Shine Group Ltd., caused shareholder Amalgamated Bank of New York to sue News Corp.’s directors in March and accuse Murdoch of nepotism.
Oh dear! Looks like Rupert is on the ropes. Let's keep him there!
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