News Corp Shareholders OK Poison Pill
The approval tightens Murdoch's control over the media company he founded and gives him greater leverage over media investor John Malone, the chairman of Liberty Media Corp., whose unexpected move to amass a stake in News Corp. two years ago prompted News Corp. to adopt the measure.
However, the relatively narrow margin of approval signaled wider shareholder discontent with News Corp.'s handling of the issue, which has raised the ire of some shareholder advocates.
News Corp. put the poison pill measure in place in November 2004 after Malone surprised Murdoch by suddenly accumulating a stake in News Corp.'s voting shares which now stands at about 19 percent, potentially rivaling the Murdoch family's voting stake of 30 percent.
Murdoch told shareholders Friday that "if we can believe Liberty, we're very close to closing a deal" to swap Malone's stake for an asset or assets owned by News Corp. Murdoch noted that with the poison pill measure extended, "we're not in any rush."
"Poison pill" measures are intended to thwart hostile attempts to seize control of a company. News Corp.'s plan would have resulted in the stake of any outside bidder such as Malone being diluted if they were to make a run at the company without the consent of the board.
Last month Liberty's CEO, Greg Maffei, said the two companies were still in discussions about several possible transactions, including ones in which Liberty would acquire TV stations from News Corp. or its 38 percent stake in the satellite broadcaster DirecTV Group Inc.
Speaking with reporters after the meeting, Murdoch chastised Malone's secretive approach. "If someone wants to buy an asset from us, they can come in the front door," Murdoch said.
News Corp. agreed to put the extension of the poison pill to a vote after a group of shareholders sued the company, claiming that it reneged on a promise not to extend it without shareholder approval. Under the agreement reached with the shareholders, the lawsuits are now dismissed because of the "yes" vote.
At the meeting, Murdoch also faced criticism from Leon J. Weil, the chairman of the Parents Television Council, an advocacy group that promotes family-friendly programming.
Weil accused the company of carving out a niche in "smutty, vulgar and violent entertainment"—singling out the sexual and violent material found on several shows on News Corp.'s FX cable channel such as "Nip / Tuck" and "The Shield."
"You should be ashamed," Weil said.
Murdoch noted that all the programs Weil mentioned were on after 10 p.m., when most kids would be asleep, and also said the company was in "constant discussion" with parental groups over ensuring the safety of young users of MySpace, the online social networking site News Corp. acquired. After the meeting concluded, Murdoch went up and greeted Weil cordially.
Asked to discuss his plans for succession, Murdoch, who is 75, responded: "No."
"I intend to be here many, many, many more years."
Murdoch has said he hopes a family member will one day lead the company. His son Lachlan, now 34, had been seen as a potential successor but gave up his executive roles at the company and moved to Australia last year. He remains on the board.
Speculation has more recently turned to Murdoch's son James, the CEO of British Sky Broadcasting Group, in which News Corp. also owns a significant stake.
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