Media magnate Rupert Murdoch has escalated his war of words with furious and litigious News Corporation shareholders over his 'poison pill' defence strategy.
He claims the move to extend it for up to two years is "totally legal" and the company has not broken any promises to investors.
A number of institutional shareholders across the globe have issued writs against NewCorp over its decision to extend the strategy for up to two years [WAMN: 12-Oct-05]. The 'pill' stratagem was implemented in November 2004 for an initial period of one year. Its intention was to block the feared predations of US cable TV mogul John Malone and his Liberty Media group.
Investors say NewsCorp promised to consult them before any extension to the 'pill' strategy was implemented. They contend the company also pledged to improve corporate governance in return for their support for corporate relocation from Australia to the more business-friendly climate of Delaware, USA.
Murdoch counters: "We said it was currently a policy of the board not to exit it [the pill strategy] without going to shareholders, and we expected a quick resolution of issues we had with Liberty. But they proved difficult so we changed our policy which was totally legal."
He insists: "It was never a bylaw, it was never a promise, it was never a pledge."
Liberty Media has an 18% stake in NewsCorp, too close for comfort to clan Murdoch's 29.5%. Negotiations with Malone have stalled and the family is nervous of assurances that his investment is long-term rather than hostile.
Data sourced from Telegraph.co.uk; additional content by WARC staff