L&G blocks Sky’s plan for buyback
BSkyB is set for a stormy Annual General Meeting (AGM) on Friday after major shareholder Legal & General (L&G) came out publicly over the weekend against the company’s share buyback plan.
There is a history of acrimony between BSkyB and L&G — the fund manager voted against a buyback plan last year. Shareholder News Corp, controlled by Rupert Murdoch, cannot vote on the proposal, so there is a slim chance it could be voted down. A spokesman for BSkyB said that the company understood it had the support of other major shareholders, although he declined to name the company’s backers.
L&G, which owns 2.5 per cent of BSkyB, will vote against the resolution because it would allow News Corp to tighten its grip on BSkyB’s equity.
News Corp already owns 37.19 per cent of BSkyB. This would increase to 39.14 per cent under the company’s plans to buy back 5 per cent of its own shares because News Corp would not sell its shares.
Some British investors opposed the appointment of Murdoch’s son James as BSkyB chief executive on corporate governance grounds. Murdoch senior is chairman of both BSkyB and News Corp. The proposal has been criticised by shareholder activists including the Association of British Insurers and the National Association of Pension Funds.
A BSkyB spokesman said yesterday: “It is disappointing that L&G made their views known ahead of Monday’s meeting with our directors. The buyback proposals were introduced after extensive consultation.”
BSkyB non-executive director Allan Leighton is due to meet L&G today.