The Murdoch family’s News Corp has extended its poison pill defence for another three years. A statement filed with the US Securities and Exchange Commission on Monday night, Sydney time said the defence was due to expire yesterday, June 18, and has now been extended to June 18, 2021.
It allows News to boost the number of shares on issue if someone, other than the Murdoch Family trust acquires a “beneficial interest” in 15% or more of the company’s B class voting shares.
The bottom line is that In the event an acquirer becomes the owner of more than 15% of the company’s voting shares, shareholders will get the right to purchase voting or non-voting shares at an exercise price.
The move entrenches the control the Murdoch family has through the Family trust owning 38% of the voting shares (Rupert Murdoch owns another 1%).
"K. Rupert Murdoch, members of his immediate family, and the Murdoch Family Trust, as well as any other person who beneficially owned 15% or more of the Company’s voting common stock as of June 28, 2013, will not be deemed to be acquiring persons under the Rights Agreement by virtue of such holdings (such persons being “exempt persons”),” the agreement specified.
This agreement was put in place and last extended in 2015. News Corp defends the agreement and its extension saying it will “maximize the long-term value of the Company for all stockholders.”
But what it does is to make it impossible for a rival to bid for the company without approval of the Murdoch family, who are a significant but minority shareholder. The Family trust controls around 17% of the A and B class shares combined, thereby disenfranchising the majority (around 83%) of shareholders.
Meanwhile the other Murdoch family company – 21st Century Fox – holds a board meeting tonight (Wednesday night) Sydney time and will consider the $US35 cash a share offer from Comcast ($US65 billion in total) for the cable, TV and film assets Fox has agreed to sell to Disney.
At the same time the Disney offer is reportedly going to be sweetened with a cash component to make it more attractive to non-Murdoch family shareholders, and to lift the value to close to the Comcast price.
Comcast meanwhile won unconditional approval from the EU on Friday for its $US31 billion bid for Sky, which is 39% owned by 21st Century Fox.
News Corp shares are down just over 1% year to date but up more than 16% in the last 12 months.They are also up 4.4% from the time the Murdoch empire was split at the end of June 2013.
News Corp is now a very different company than the one created in mid – 2013. It’s biggest business will be the Foxtel/Fox Sports/Sky News pay TV operation in terms of gross earnings (compared to the company’s traditional base, its news and Information division).
But the growth assets are the 61% of REA, the Australian based website property listing operation which also owns 20% of its US counterpart, Move (which was bought after the float) and which is now building momentum in the huge US housing market.
