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Liberty Media

News Corp. has approved the repurchase of up to $3 billion of its shares, a sign that a deal to buy Liberty Media Corp.'s roughly $8.4 billion News Corp. stake may not be close at hand.

Top executives at the New York-based media conglomerate have said a buyback wouldn't be prudent as long as the company is negotiating with John Malone's Liberty Media to buy at least part of its 18 percent voting stake in News Corp.

"This announcement would seem to indicate that negotiations have stalled," said Jessica Reif Cohen, an analyst with Merrill Lynch.

News Corp. Chairman Rupert Murdoch said during a conference call in May that he expected to reach a deal with Liberty by August, saying the parties were at a "very sensitive point in our negotiations."

News Corp. spokesman Andrew Butcher said the share-buyback plan "has nothing to do with Liberty. This is about our stock being undervalued." He declined to say whether talks with Liberty have reached an impasse.

Liberty Media spokesman Mike Erickson wasn't immediately available to comment.

Even with the share-repurchase authorization, Lehman Brothers analyst Vijay Jayant said, News Corp. likely still has "ample flexibility" to complete a transaction with Liberty. He noted that News Corp. has nearly $6 billion in cash on hand and more than $2 billion in annual free cash flow.

The authorization shows News Corp. wasn't willing "to let its balance sheet be held up" by the protracted negotiations with Liberty, Jayant said.

The share-repurchase plan comes as News Corp.'s shares have slumped this year.

The company said it expects to complete the program in two years, buying a roughly equal number of Class A and Class B shares in the open market.

News Corp. last authorized a share repurchase in 2000 for $1.5 billion over 12 months.

News Corp.'s Class B shares rose 43 cents, or 2.5 percent, to close at $17.31 Monday on the New York Stock Exchange.

Liberty Media's Class A shares fell 4 cents, or 0.4 percent, to finish at $10.45 on the NYSE.
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