Murdoch remortgages BSkyB stake
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Murdoch may use money to fund U.S. satellite company
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LONDON, England (Reuters) -- Shares in BSkyB fell on Tuesday after media baron Rupert Murdoch effectively remortgaged part of his stake in the UK broadcaster, in what analysts saw as a move to help fund a bid for U.S. satellite TV firm DirectTV.
The shares slumped four percent after News America Inc., a U.S. subsidiary of Murdoch's News Corp., said in the early hours of Tuesday that it planned to raise $1.35 billion through the issue of notes convertible into BSkyB shares.
Media analysts said the terms of the offer were unclear and it was difficult to estimate the impact on BSkyB stock, but they reckoned that as many as 40 million to 50 million shares could be issued to note-holders upon conversion.
News Corp owns about 35.4 percent of BSkyB.
DirectTV, the biggest satellite TV operator in the United States, is owned by Hughes Electronics.
News America plans to raise $1.35 billion through the new convertible notes and, separately, to buy back about $715 million in existing convertible securities. Analysts said this would leave the News Corp unit with $635 million in cash.
It was unclear whether any new BSkyB shares would be issued on conversion of the new notes or if Murdoch would use his existing shares to back the notes. BSkyB and a spokesperson for News Corp in Europe both declined to comment.
At 0930 GMT BSkyB shares were down 3.7 percent at 610-1/2 pence, the weakest performer in the FTSE 100.
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