The Australian-listed preferred shares rose sharply on the news it would re-purchase 6.45 per cent of its issued preferred stock, closing up a 1.19 or 6.3 per cent at 19.99. Its ordinary shares gained only 2.4 per cent to 23.16.

Analysts said the buyback, due to start on September 18, would limit the dilutive impact of the company's plan to issue the preferred scrip as part of its $5.35 billion takeover of Chris-Craft Industries Inc.

News Corp, which has its headquarters in New York, was not expected to aggressively buy the shares as the buyback's purpose was to offer price support to the stock, they added.

A News Corp official told Reuters the company would re-purchase about 138 million preferred shares, which have restricted voting rights. The buyback is only for its Australian-listed preferred securities.

Analysts said the buyback was designed to show the media giant's commitment to its investors ahead of the scrip component of the Chris-Craft deal, still subject to regulatory approval.

Chris-Craft owns 10 television stations in the United States, including WWOR in New York and KCOP in Los Angeles. News Corp owns the Fox Television Network and 22 US television stations.

"It's about maintaining the value of the preferred shares and to bring them back after the dilution that will occur when they issue the preferred shares to Chris-Craft as part of the agreed deal,'' said a media analyst who asked not to be named.

"So it's really showing the company's commitment to maintaining the value of the preferred shares and this is of course so investors are reassured."News Corp captures 70 per cent of its revenue from the US, and also has operations in the UK, Canada, Australia, Europe, Latin American, Asia, Japan, New Zealand and Fiji.

The Fox Entertainment group, which is 82.76 per cent owned by News Corp, will run the Chris-Craft stations under its Fox Television Network. The FCC could take up to a year to scrutinise the deal which may face concentration hurdles.

News Corp, which had total assets of $40 billion and total annual revenues of $14 billion at June 30, said in a statement on Friday the on-market buyback would run for 12 months or until the targeted scrip had been acquired. "The time period is in line with the Chris-Craft deal," said an analyst.

The move comes after News Corp posted a fourth quarter net profit ahead of market expectations on August 17 and forecast a solid first quarter for the three months ending September 30.

News Corp publishes newspapers, books and magazines, runs cable, satellite and terrestrial television and produces films and TV programmes and is also developing Internet businesses.

Its newspaper mastheads include The Sun, The Times, The Sunday Times and The News of The World in Britain and in the United States it owns The New York Post as well as book publisher Harpercollins and Hollywood film studio 20th Century Fox.