June 14, 2006
Judge Approves Revised News Corp. Investor Accord
From ISS’ Friday Report: “A Delaware judge has approved a revised settlement to resolve a lawsuit by an international coalition of institutional investors over News Corp.’s “poison pill” takeover defense. Delaware Chancery Judge William B. Chandler III asked the parties to revise the settlement’s limits on future lawsuits over takeover defenses after Liberty Media objected to the wording as “overly broad.” The judge approved the revised agreement June 1, Bloomberg News reported.
The suit by the Australian Council of Super Investors, the Connecticut Retirement Plans and Trust Funds, and U.K. and Dutch pension funds claimed that company officers and directors broke a promise made in 2004 when News Corp. sought shareholder approval to reincorporate from Australia to the U.S. Less than a month after the reincorporation vote, the company adopted a poison pill after Liberty disclosed that it had acquired a 17 percent stake. In August 2005, the board extended the pill for another two years without seeking shareholder approval, prompting the institutional investors to sue.
Under the settlement, News Corp. will ask shareholders to vote on a two-year extension of the pill at the company’s annual meeting in October. If shareholders don’t approve the extension, then the company can either let the pill expire or treat the vote as advisory and continue the litigation.”