News Corp. Creates Poison Pill

[shawn703]

Rupert Murdoch's News Corp. Ltd. moved to ward off any hostile bid from U.S. cable company Liberty Media Corp. with a plan to issue stock options to dilute the stake of any predator.

John Malone's Liberty began a transaction last week that could increase its voting stake in News Corp. to about 17 percent from 9 percent, raising speculation it could launch a takeover bid for Murdoch's media empire.


Under a defense announced on Monday, News Corp. said it would give its shareholders the right to buy one News Corp. share at half price for each share they own, if any party buys a 15 percent stake in the company. Shareholders would be able to buy up to $80 of half-price shares.


The strategy would exclude the purchaser of the 15 percent stake, providing a "poison pill" defense against anyone plotting to take control of News Corp. from 73-year-old Murdoch and his heirs apparent, sons Lachlan and James.


more...
http://story.news.yahoo.com/news?tmpl=story&u=/nm/media_newscorp_dc

[krkaufman]

1. How the heck would that even be legal?!? n/t

[Maat]

2. Certain anti-takeover devices are legal, from what this..

student has learned.

But others leave the corporation open to stockholder action.

[Wickerman]

3. I don't pretend to understand the implications of this

but I LOVE the idea of Murdoch being victim of a hostile takeover attempt.

That was flat out how his empire was built. In the early 90's I worked for a very successful yet family owned publishing company. We made a product free from high-powered market constraints. We took our time and put out a high quality, respected product. Murdoch saw us as under-utilized and under-performing.

In the process of defending against his hostile takeover the company teetered on the edge of bankruptcy for a couple of years. Eventually, we were sold to another media holding company that stripped off the cherry products and decimated the professional/low profit products.

We turned out more product than ever, but of lesser quality and more expensive. It got so profit centered that it was easy to leave. God only knows what would have happened if Murdoch would've actually got hold of us. :scared:

[Roland99]

4. Will Soros buyout Sinclair? *That's* what I want to know!