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News Corp. Extends Exchange Period

Feb 14, 2005  •  Post A Comment

Shareholders Have Asked Court to Block Transaction

Rupert Murdoch’s News Corp. last Monday extended for the second time the deadline for an exchange offer that would return full ownership of Fox Entertainment Group to News Corp., citing as reason for the extension a hearing next month to address some shareholders’ objections to the offer.

The Delaware Court of Chancery is scheduled to hold a hearing March 1 on a request by several shareholders unhappy with News Corp.’s offer who asked that the transaction be blocked. In light of the hearing, News Corp. pushed to March 4 the deadline by which FEG shareholders can exchange their shares in FEG for stakes in News Corp. The original deadline was Feb. 4, but it was changed to Feb. 22.

About 17 shareholder suits have been filed to block News Corp. from moving forward with the $6 billion offer, which would pay FEG shareholders $33.54 per share-an offer some stockholders consider too low.

News Corp. owns a controlling 82 percent of FEG, which went public in 1998 as a way for News Corp. to tap U.S. capital markets. However, at the end of last year News Corp. changed its residency to the United States from Australia, obviating the need for FEG to remain public.

News Corp. officials have maintained that the offer presently on the table is fair and final. In a statement issued Feb. 7, the company said of the upcoming hearing that it “believes that these [shareholders’] claims are without merit and intends to vigorously contest such allegations.”