Will Murdoch Buy Something Else Now That He Has Given Up On BSkyB?

It’s Official: News Corp Withdraws BSkyB Bid
Will U.S. Officials Now Investigate Murdoch?
So what now for Rupert Murdoch? Well, he’ll have a lot more cash to play with now that he has decided to scrap his $14 billion acquisition of the BSkyB shares that he doesn’t already own. He’ll probably look for something else to buy, possibly in education services — his new passion. You can be sure that it won’t be an asset that would require him to seek approval from government officials. But his shareholders also are eager to get their hands on some of that loot. Murdoch tried to appease them yesterday by announcing that News Corp would buy back $5B worth of its own stock. Don’t be surprised if they start lobbying for higher dividends too. Murdoch may have to give them what they want if News Corp’s stock price falls as questions arise about his management, the quality of the board of directors’ oversight — and, especially, succession plans.

Some analysts say the Murdoch’s defeat may lead him to think about selling, not buying. His newspapers, once his proudest possession, could be seen as too much trouble. Nomura Equity Research’s Michael Nathanson says in a report today that the newspapers are “highly inconsequential” for the entertainment company. What’s more, now that BSkyB is out of the picture, Murdoch may want to persuade investors that News Corp’s beaten-up stock is a bargain. The shares are trading 11% below the market average based on the ratio of price-to-earnings. They’re up 2.9% in mid-day trading, ahead of the overall market.