News Corp fends off Starboard proposal to collapse dual-class share structure
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The news: News Corp says it has fended off a non-binding proposal from activist hedge fund Starboard Value to loosen the Murdoch family’s grip on the company by eliminating its dual-class share structure.
The context: The company said the proposal was voted down at News Corp’s annual general meeting, held after 5:00am Sydney time, following a weeks-long campaign that secured the support of investors in the United States and in Australia.
Starboard Value put its proposal to shareholders on 9 September in a letter signed by the fund’s managing member, Jeffrey Smith. He wrote that dual-class share structures are not in the best interests of shareholders and are “not reflective” of corporate governance best practices.
The Murdoch family has an economic stake in News Corp of about 14% but controls some 40% of the votes.
The letter said the transition of power from Rupert Murdoch to his children, following Lachlan Murdoch’s ascension to chair last year, has “allowed for complicated family dynamics” to potentially destabilise the company and impact its strategic direction.
What they said: “News Corp today announced that, at its Annual Meeting of Stockholders, stockholders overwhelmingly elected the company’s full slate of Directors and voted with the Board’s recommendations on all proposals, including convincingly defeating the non-binding proposal to adopt a recapitalisation plan that would eliminate News Corp’s dual-class capital structure,” the company said in a statement released shortly after the meeting.
“News Corp actively solicits feedback from its investors throughout the year, and values the ongoing dialogue generated by these extensive outreach efforts. We are pleased stockholders once again convincingly supported the company and the Board of Directors on all matters.”
The source: News Corp statement
