City veteran and Fundsmith founder Terry Smith reacts to the news Rupert Murdoch's News Corp has moved to shore up its share price with a $5bn stock repurchase programme.
The announcement of an increased share buyback at News Corporation is clearly meant as a sop to shareholders who might justifiably be querying whether Murdoch family control is really in their best interests. The main criteria which determine whether a share buyback creates value for remaining shareholders is a) the shares should be trading below intrinsic value; and b) there should be no better alternative use for the cash that would deliver better returns than the buyback. Given the outcome of News Corp's acquisitive activity in recent years, there seems little doubt a buyback would...
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