By: E&P Staff
News Corp. shareholders at their annual meeting Friday approved extension of the controversial “poison pill” provision aimed at preventing a hostile takeover, especially one led by Liberty Media Corp. Chairman John Malone.
News Corp. said the measure was approved by a vote of 57%, a margin that reflects the lingering controversy about the way it was first adopted in 2004. A year ago, a group of institutional investors from Australia, Europe and the U.S. filed suit against News Corp. Chairman Rupert Murdoch and other top executives, claiming that they broke a promise not to adopt any poison pills for at least 12 months after reincorporating from Australia to Delaware.
With the new shareholder approval, the lawsuits will be dismissed, according to an agreement with the plaintiffs.
Murdoch first sought the poison pill when Malone began adding to his small stake in the company, eventually acquiring 19% and potentially threatening Murdoch family control of the global media company. Murdoch and other family members own about 30% of the company.
Under the News Corp. poison pill plan, large stock purchases by an unwanted suitor would trigger the issuance of new shares, making a hostile takeover prohibitively expensive.
In a vote of confidence in present management, shareholders also re-elected all company directors and rejected a plan for annual election of directors, which is favored by good corporate governance advocates. News Corp. directors are elected every three years.
In his speech to shareholders, Murdoch said the company was driven by four strategic elements:
“First, we are willing to ignore or even take on conventional wisdom. Second, we generally try to invest early in new businesses rather than overpaying for already established businesses. Third, we are patient as these new efforts find their footing. Fourth, we enjoy the growth and profitability as the businesses mature, but we are always thinking about and building the next generation of new revenue sources.”
He noted with the acquisition of MySpace.com, News Corp. sites “now rank second in total page views and fifth in unique visitors, reaching more than 70 million people per month in the United States.”
Revenue from MySpace has doubled every four months over the last year, he said.
“Our print businesses, and especially newspapers — the historic heart of this company — continue to deliver value for our company and shareholders, in part by generating huge amounts of cash that fund and fulfill our strategy,” Murdoch said. “Right now our print business have more total readers than they ever have, thanks to the Internet. The distinction that today seems to divide ‘new’ and ‘old’ media will prove illusory over time. In the meantime, we are investing in the future of these businesses, with new color printing plants in the (United Kingdom).”