News Corp holders re-elect board over protest

NEW YORK - Four News Corp directors were re-elected on Friday, including Chief Operating Officer Peter Chernin, but about 16 percent of shareholders withheld their votes in protest against the company's extension of a poison pill provision.

News Corp., owner of 20th Century Fox movie studios, the Fox News Channel and the New York Post newspaper, was sued last week by a group of Australian, US and European investors alleging the company had reneged on a promise to seek shareholder approval before extending the poison pill provision.

"There has been no outcry," News Corp. chief executive Rupert Murdoch told reporters following its first annual meeting as a US company. Addressing portrayals of the actions of a minority of News Corp. shareholders, Murdoch added, "I've had hundreds of phone calls, there has been one call about the poison pill." Fearing a hostile takeover, the company enacted a one-year poison pill provision last year after Liberty Media boosted its voting stake in News Corp to about 18 percent.
Two months ago, News Corp.'s board extended the provision for another two years without seeking shareholder approval.

Also reelected as directors were Chase Carey, chief executive of DirecTV Group Inc.; Rod Eddington, chief executive of British Airways; and Andrew Knight, director of Rothschild Investment Trust. They were elected to three-year terms.

Shareholder activist Evelyn Davis challenged Murdoch, an Australian-born US citizen, on the staggered terms for company directors: "You are now in the United States, start acting like it ... It's an outstanding board but they should be elected every year."

Murdoch replied: "It certainly is an issue. We are studying it."

News Corp., which has spent about $US1.3 ($NZ1.87) billion on three Internet deals in as many months, said its earlier expectation that it would spend up to $US2 billion was not a hard target.

"I don't think we set that figure in concrete," Murdoch told reporters. "We're OK where we are, but we're exploring our options."

The company was recently mentioned in news reports as having held conversations about purchasing a stake in Time Warner Inc.'s

AOL Internet division. Sources familiar with the discussions have said Google Inc. , Comcast Corp. , Microsoft Corp. and Yahoo Inc. have held discussions to buy a stake in the world's largest online service.

"This is really a competition between Google and Microsoft as to who gets AOL," Murdoch said.

Wall Street continues to speculate over News Corp.'s next acquisition target, a topic Murdoch said his company has yet to resolve.

"We could acquire a (Web) search technology tomorrow," Murdoch said. "That's not necessarily the right way to go."

He added, "We have not made up our minds." Capping a flurry of deals that started with the creation of Fox Interactive Media in July was the $US650 million October purchase of video game and young male lifestyle Web company IGN Entertainment Inc.

The deals also included News Corp.'s announcement in August that it planned to buy online sports network Scout Media Inc. and its purchase in September of social networking company Intermix Media Inc for $580 million.

"This is a time of fundamental change," Murdoch told investors.

- REUTERS