SYDNEY (AFP) - Global media group News Corp. has launched a shareholders' rights plan to protect shareholders' interests if any attempt is made to wrest control from executive chairman Rupert Murdoch and his family.
It followed a move by US cable group Liberty Media, owned by John Malone, to increase its voting power to 17 percent from some 9.0 percent after shareholders last month approved a plan to relocate the group's head office to the US state of Delaware.
News Corp. said the rights plan "grandfathers" existing holdings of voting stock and existing contracts and while it would permit the Liberty transaction, any additional acquisitions of stock would trigger the provisions.
Under the plan, one rights share would be distributed for each voting share and non-voting stock.
These rights would only become exercisable if a person or group obtains ownership of 15 percent or more of the voting stock or announces a tender offer which would result in ownership of 15 percent or more.
In such circumstances each rights share will enable the holder to buy additional stock at half price.
Additionally, if any person becomes the beneficial owner of 15 percent or more of the voting stock, the Murdoch Interests Agreement would be terminated.
That agreement imposes restrictions on the Murdoch family, such as limiting its ability to acquire additional voting stock to three percent every six months.
The Murdoch family currently holds 29.4 percent of News Corp's voting stock.
News Corp fell 1.01 Australian dollar (76 cents) to 22.69 Australian dollars on Monday.
Ord Minnett equities analyst Ron Cameron News Corp. "really took a hit after the plan to protect shareholders was announced; it is really a poison pill (defence) to keep John Malone away."
Murdoch had earlier said he would "lose no sleep" over Malone's move.
11/08/2004 - 06:46 GMT - AFP