Defying protests from UK-based institutional investors - between them accounting for 18.3% of BSkyB shares - the Murdoch family last week bulldozed through the satellite broadcaster's annual meeting [WAMN 15-Nov-04] a motion that exempts News Corporation from its obligations under the UK takeover code.
The motion concerned NewsCorp's plan to buy-back 5% of the company's shares. But as the clan Murdoch will not participate in the buyback, the rule change will allow its stake in BSkyB to 'creep' from 35.3% to 37.2% - which prior to the vote would have required the family (or any other investor in a similar situation) to make an offer for the entire company.
Among the thwarted BSkyB shareholders are such major investment groups as Insight, Isis and Standard Life. The proposal was also criticised by the Association of British Insurers.
However, the 'independent' director of BSkyB demonstrated their autonomy by unanimously voting in favour of the proposal.
Assuaged one of these free spirits, BSkyB deputy-chairman and pillar of the global establishment, Lord Jacob Rothschild: "It's always a difficult one this; there are many ways you can return cash to shareholders. In the end we thought this was a fair balance." He added, as if in mitigation, that "News Corporation used to own 40% of this company a few years ago".
After the meeting patriarch Rupert and his younger son James (ceo of BSkyB) beat a hasty retreat leaving unasked and unanswered the press pack's questions about their share-building stratagem.
Data sourced from Sydney Morning Herald; additional content by WARC staff