Advertisement
YOU ARE HERE: LAT HomeCollections

News Corp. to Allow Vote on Poison Pill

April 07, 2006|From Bloomberg News

News Corp. said Thursday that it had agreed to let shareholders vote on whether to extend an anti-takeover defense, settling a suit and limiting Chairman Rupert Murdoch's control over any sale of the company.

The accord averts a trial set for April 24. Delaware Chancery Court Judge William B. Chandler III allowed a group of investors to go ahead with breach-of-contract claims in December, saying New York-based News Corp.'s directors had pledged to seek their approval before modifying the poison-pill plan.

"This is pretty extraordinary," said Stuart Grant, the plaintiffs' lawyer. "Shareholders normally don't have a right" to vote on poison-pill plans in the U.S., he said.

News Corp. says it set up the poison pill in November 2004 to stop John Malone's Liberty Media Corp. from increasing its 18% voting stake.

Malone, News Corp.'s second-largest investor after the Murdoch family, had asked the company to buy back shares to increase their price.

News Corp. shares rose 13 cents to $18.03. Liberty Media shares rose 4 cents to $8.29.

Andrew Butcher, a News Corp. spokesman, said the company had no comment on the settlement, which requires court approval. John Orr, a spokesman for Englewood, Colo.-based Liberty Media, said the company was studying the settlement and had no further comment.

Poison-pill defenses are designed to make hostile takeovers too expensive by letting existing shareholders buy stock at a discount. Under News Corp.'s plan, the company would offer half-price stock to shareholders if Liberty Media boosts its stake. Shareholders would vote on a two-year extension of the plan at News Corp.'s annual meeting in October, Grant said. They would maintain the right to vote on such plans for 20 years, he said.

Malone acquired stakes in News Corp. in 1999 when Liberty Media swapped an interest in the Fox/Liberty Networks sports venture for News Corp. stock. A year later, Malone exchanged a stake in Gemstar-TV Guide International Inc. for more News Corp. stock. Malone boosted his voting stake to 18% in early 2004.

Advertisement
Los Angeles Times Articles
|
|
|