A judge approved News Corp. (NWSA:US)'s settlement of a lawsuit that accused Chairman Rupert Murdoch and other directors of breaking a promise to let shareholders vote on whether to extend the media company's takeover defense.
Delaware Chancery Court Judge William B. Chandler III signed the agreement today, nine days after asking lawyers to rewrite language limiting investor lawsuits. Liberty Media Corp., owner of an 18 percent stake in News Corp., had objected to the wording as ``overly broad,'' Chandler wrote.
Investors led by Australian pension fund UniSuper Ltd. sued New York-based News Corp. in October, two months after the company extended its ``poison-pill'' plan without seeking their approval. Under the settlement, News Corp. shareholders will be able to vote on such plans for the next 20 years if they approve a two-year extension of the current one in October.
The terms are ``probably more than we would have achieved in litigation,'' Megan McIntyre, a lawyer for shareholders with Grant & Eisenhofer in Wilmington, Delaware, said today. Chandler awarded the law firm $1.65 million in fees and expenses, to be paid by News Corp.
Class A shares of News Corp., owner of the Fox television network, rose 38 cents to $19.45 in New York Stock Exchange composite trading at 4:02 p.m. They have risen 25 percent this year. Liberty Media Holding Corp. rose $1.85 to $81.42 in Nasdaq Stock Market trading, bringing the year's gain to 16 percent.
News Corp. has said it set up the poison-pill plan in November 2004 to prevent Englewood, Colorado-based Liberty Media, led by billionaire John Malone, from building a bigger stake. Poison pills seek to make hostile takeovers prohibitively expensive by allowing existing shareholders to buy stock at discount prices.
``We're very pleased with the outcome,'' Andrew Butcher, a News Corp. spokesman, said in an interview. News Corp. is the fourth-largest U.S. media company, with sales of $23.9 billion in its last fiscal year.
John Orr, a Liberty Media spokesman, declined to comment.
The case is UniSuper Ltd., et al v. News Corp., CA1699-N, Delaware Chancery Court (Wilmington).
To contact the reporters on this story: Phil Milford in Wilmington, Delaware at email@example.com Dawn McCarty in Wilmington at firstname.lastname@example.org
To contact the editor responsible for this story: Patrick Oster at email@example.com.