News Corporation lost no time in moving onto the defensive after Friday's news that cable entrepreneur John Malone had hatched a deal with Merrill Lynch that will allow him to acquire a further 8% of NewsCorp stock next year, thereby hiking his present 9.2% to over 17% [WAMN 05-Nov-04].
This is clearly not to the liking of Clan Murdoch which runs the global media giant run via its magic 12.6% stake that transforms at the wave of a wand into 29.5% of the voting rights.
But even this impressive piece of fiscal wizardry is insufficient to protect the family's suzerainty from the predations of Malone should he so decide. Patriarch Murdoch, however, is not easily out-necromanced and has conjured a defensive wheeze worthy of the Dark Lord Sauron.
Irked and alarmed by the Malone move, which NewsCorp protests was made "without any discussion with [us], or prior notice", Murdoch "has put in place a rights plan to protect the best interests of all shareholders".
Aussie analyst Paul Xiradis, who helps manage more than $1.5 billion at Ausbil Dexia in Sydney, gasped admiringly: "It's a significant poison pill."
"What [NewsCorp has] effectively announced is that if someone was to aggressively build up a holding above 15% without NewsCorp's approval, they would have the ability to issue bonus shares to every stockholder other than that who's been the aggressor."
Sauron rules for now. But Gandalph is unlikely to be sitting on his wand for long.
Data sourced from Google Business News; additional content by WARC staff