Shares up as News Corp board considers Rupert Murdoch replacement

News Corp's shares shot up nearly 4% in the early hours of this morning after a report that independent directors at the company were considering replacing Rupert Murdoch with Chase Carey, his right hand man and chief operating officer.

It is widely believed that Carey's elevation would please US investors concerned about the effect of the hacking scandal in the UK on the company's huge operations around the world.

Bloomberg reported the discussions, citing "people with knowledge of the situation" but said no decision had been made yet. Crucial to the decision would be how Murdoch performs in front of the parliamentary select committee this afternoon, it reported.

Citing three different unnamed sources, Bloomberg said News Corp executives who watched Murdoch rehearsing had concerns about how he handled the questions.

However, sources later told the Reuters news agency that News Corp independent directors were fully behind Rupert Murdoch.

That report led to the shares dipping from the earlier highs in Australia to be up by around 2.5%.

The board member and another person familiar with the company's plans also denied Murdoch's fate depended on his performance in Westminster.

"There was no meeting of independent directors. This board totally supports the top management. We're united behind him," the board member said.

The second person said the board has had a succession plan in place for some time and it regularly reevaluates those plans. "Suggestions that a plan is being accelerated or implemented are inaccurate," the person said.

Carey, a 23-year News Corp veteran and long-time lieutenant of Rupert Murdoch, is favored by investors in the United States to take control of the business if Murdoch, 80, stands down.

Until the phone hacking scandal, James Murdoch, who is deputy chief operating officer, had been seen as his father's successor.

The growing uncertainty around News Corp and its future has hurt its share price and the company had lost more than $6 billion in market capitalization value since the UK phone hacking issue erupted on July 4.

But signs that investors might starting to recover a little confidence in the company after dropping more than 17 percent in the US.