Murdoch defends use of 'poison pill' at News
The comments were made to analysts as part of the Australian leg of an investor roadshow over the looming split of the media company's newspaper and publishing business from its broader entertainment assets this month.
In preparing for the split, News Corp has added a provision to allow shareholders to ward off a hostile takeover. Each share of the new publishing company will include a right to purchase $US180 ($187) worth of stock for $US90, triggered when any investor acquires 15 per cent or more of the voting shares.
"I know its uncommon in this country, but its very common in America in these situations," Mr Murdoch said of the defensive instrument, also dubbed a poison pill.
The new publishing company, which will retain the News Corp name, kicks off on June 28 with assets such as The Wall Street Journal, The Times, Australian pay TV assets and a stable of Australian newspapers, including The Daily Telegraph and the Herald Sun.
News' TV and film assets will be renamed 21st Century Fox.
Mr Murdoch will be chairman and chief executive of 21st Century Fox and executive chairman of the new News Corp. His sons, James and Lachlan, will be on both boards.
Wednesday's briefing follows a similar investor day held in New York last week. News says it is splitting the publishing company from its TV and movie business to take advantage of the shift away from print to digital content.
While not committing to a dividend for the new publishing company, Mr Murdoch said there were likely to be "significant movements" in the dividend as the cash flow of the publishing company grew. But he said investors needed to look at the company as a growth stock rather than a yield play.
The incoming chief executive of the publishing company, Robert Thomson, said the industry was in the "middle of the transition" of the shift of revenue from traditional printed products towards digital content. He was optimistic about the medium-term prospects for the company in revenue growth, and in margin expansion in digital assets.
"The lessons that we're learning whether in the book business or the newspaper business is that people are increasingly paying for content," he said.
Even so, Mr Thomson said he was "not naive" about the challenges faced by newspapers.
"Costs are being confronted and cut, and the mastheads are being reoriented. That transformation will take longer than a couple of quarters," he said.
Frequently Asked Questions about this Article…
News Corp added a defence that gives each share in the new publishing company a right to buy US$180 of stock for US$90 if any investor acquires 15% or more of the voting shares. That dilution mechanism — commonly called a “poison pill” — is designed to make hostile takeovers harder by substantially reducing the economic attraction of a large, unsolicited stake.
The company added the provision while preparing to separate its publishing business from its entertainment assets to guard the newly listed publishing entity against a potential hostile acquisition during or after the split.
The new publishing company, which will retain the News Corp name, begins on June 28. The company will include assets such as The Wall Street Journal, The Times, Australian pay TV assets and a stable of Australian newspapers including The Daily Telegraph and the Herald Sun.
News Corp’s TV and film assets will be renamed 21st Century Fox. Rupert Murdoch will be chairman and chief executive of 21st Century Fox, while remaining executive chairman of the new News Corp.
Robert Thomson is the incoming chief executive of the publishing company. Rupert Murdoch will serve as executive chairman of the new News Corp, and his sons James and Lachlan Murdoch will sit on both company boards.
Rupert Murdoch did not commit to an immediate dividend. He said there were likely to be “significant movements” in dividends as the publishing company’s cash flow grows, but he encouraged investors to view the business as a growth stock rather than a yield play.
Incoming CEO Robert Thomson said the industry is in the “middle of the transition” from print to digital. He expressed optimism about medium‑term revenue growth and margin expansion in digital assets, noting that people are increasingly paying for content.
Thomson acknowledged the challenges facing newspapers: costs are being confronted and cut, mastheads are being reoriented, and the transformation to a digital-first model will take longer than a couple of quarters.
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