A lot of action around News Corp over night and this morning as the anti takeover poison pill protection was extended for three years, a 10 cents a share semi annual dividend was revealed, job cuts announced at the Wall Street Journal and a change in senior management in Australia.
The moves came two days after the succession at 21st Century Fox was confirmed with sons Lachlan and Rupert Murdoch taking the reins and sharing power with dad Rupert – with Lachlan considered to be the slightly senior with the executive co-chairman’s role at Fox.
In Australia News Corp Australia revealed the changes at the top of the company which were signed off on at the parent’s board meeting in New York overnight).
News’ interim CEO Julian Clarke will retire at the end of the year. He came out of retirement to take the role in 2013 after Kim Williams was sacked.
Clarke will be replaced by News Australia’s Chief Operating Officer, but APN News and Media CEO, Michael Miller will return to his former employer as executive chairman of News Corp Australasia. That is an appointment driven by Lachlan Murdoch, the co-chairman of News with Dad Rupert.
In a separate announcement APN confirmed Miller’s departure and his replacement by the boss of APN”s Australian Radio Network Ciaran Davis. News owns 14.9% of APN.
The local news followed that busy night in New York.
The poison pill move was extended for three years, until June 18, 2018 and comes less than a year after a shareholder move to end the company’s a dual-class voting structure that would have undermined control of the company by News Corp Chairman Rupert Murdoch and his family. That was narrowly defeated at the 2014 annual meeting in Los Angeles.
In a news release this morning, News Corp defended the extension of the poison pill preserves the company’s ability to carry out its strategic plan.
Poison pills use a variety of means to make it difficult for a company to be taken over by a party deemed to be ‘hostile’.
In News’ case it will increase the number of shares in the company, diluting the size of the stake held by any raider.
That will be done by allowing existing News Corp investors to buy new shares at a discount if 15% of the voting shares are bought by someone not approved by the board (meaning the Murdoch family). This poison pill arrangement was first adopted by the old News Corp nearly a decade ago after then company had been stalked by US cable magnate, John Malone as it moved from being based in Australia to the US.
News Corp also announced overnight that it will begin paying a “semi-annual” dividend of approximately 10 US cents a share, starting in the first quarter of its 2016 fiscal year (making 20 US cents a year).
News CEO, Robert Thomson said the dividend (its first since the split in the Murdoch empire in late June, 2013) was “a sign of confidence in the state of our business and faith in our prospects for the future”.
But it was announced as 100 job cuts were revealed at the Wall Street Journal across the world (it was rumoured several weeks ago). News though claims it expects to add a number of jobs, including some new digital positions, in coming days and weeks.
And back home in Australia, the Ten deal (which will see Foxtel buying a 14.9% stake at 15 cents a share, or $77 million) and selling a 24.9% stake in its ad arm, MCN – looks a little shaky after Ten shares plunged 22% on Thursday on confirmation that the Prime Minister, Tony Abbott had abandoned media reform in Australia because of a lack of unanimity for it from the sector.
Kerry Stokes had opposed it and Seven West Media shares rose 2% on Thursday, confirming him to be a winner.
Ten shares have fallen from 26.5 cents on Monday when the Foxtel deal was announced, to 20.5 cents yesterday. It is not uncertain where the deal stands if there is going to be no relaxation of media ownership and control rules.
The ACCC will decide in the end, but the market fall is a big signal investors do not see the deal succeeding, or it can be just a kneejerk reaction to the shock news that there will be no media law changes, as envisaged by Communications Minister Malcolm Turnbull.
