News Corp Defends Poison Pill Move

by Glen Shapiro, LawAndTax-News.com, New York

11 October 2005

Rupert Murdoch's News Corp has slammed a group of 11 international pension funds which are suing the group over plans, announced in August, to extend so-called 'poison pill' defences.

It emerged this summer that Murdoch had extended an anti-takeover measure for a further two years without consulting the group's stakeholders.

The arrangement was put in place in November 2004 to prevent Liberty Media from increasing its 18% stake and staging a hostile takeover, and as part of a pledge made during News Corp's relocation from Australia to the United States, the firm's board stated that they would only extend the measure beyond November 2005 with shareholder approval.

The unilateral decision taken by Mr Murdoch as he struggled to keep the group under family control was condemned at the time by observers as a serious corporate governance breach.

Responding to the suit being brought by the Australian Council of Superannuation Investors and other pension funds, News Corp spokesman, Greg Baxter told the Sydney Morning Herald that shareholders' rights will be "denuded entirely" if Liberty Media succeeds in seizing control of the group.

"How they think that they're representing the interests of their members is just beyond me," he observed, continuing:

"If they're successful with this action, what they will achieve is precisely the opposite of what they claim they want."

Recommended