News Corp. shareholders OK Liberty deal

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NEW YORK - In a special meeting here Tuesday, News Corp. shareholders approved a planned deal with John Malone's Liberty Media that will strengthen chairman and CEO Rupert Murdoch's control over his entertainment conglomerate.

The transaction, green lit by shareholders representing 99.76% of outstanding Class B shares, will see News Corp. swap its controlling 38.4%stake in satellite TV operator DirecTV Group, three regional sports networks and $550 million in cash for a large chunk of News stock held by Liberty. The deal, first announced in late December, is valued at $11 billion.

The swap will boost the Murdoch family's voting stake in News Corp. from about 31% to 38%.
It still needs regulatory approval and is expected to close by mid-year or the third quarter at the latest.

The close of the deal will officially end a two-year battle that started when Liberty quietly took a sizable voting stake in News Corp. by changing non-voting into voting shares.

Murdoch in reaction had his board pass an anti-takeover measure known as a "poison pill." Wall Street observers expect the News Corp. board to drop that provision as soon as the Liberty swap closes.

Analysts have argued the deal is good for both companies and should boost their respective shares.

Liberty increases its focus on owning operating assets and also gets cash in the transaction, they point out. News Corp., meanwhile, will get rid of a possible distraction and shareholder concern, as well as buy back 16% of News Corp. stock, analysts add.

Murdoch at the meeting Tuesday said a buyback of a similar size in the open market would take about 18 months.

He also said that the swap will allow News Corp. to end its exposure to the U.S. satellite TV market, which he said has become increasingly competitive.

The chairman emphasized again though that News Corp. remains happy with its satellite operations in the U.K. and Italy.

Tuesday's shareholder meeting in midtown Manhattan was a brief affair of about 10 minutes with no shareholder questions on the proposed deal.
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