BREAKING NEWS: Starboard Value Urges News Corp to Abolish Dual-Class Share Structure
In a surprise move, activist investor Starboard Value has called on media conglomerate News Corp to eliminate its dual-class share structure, citing concerns about the excessive influence wielded by the Murdoch family, led by Rupert Murdoch himself.
According to reports, Starboard Value, founded by Jeffrey Smith, held a significant stake in the company and has been scrutinizing its governance structure in recent months. In its latest move, the company has urged News Corp shareholders to vote against the appointment of Lachlan and James Murdoch, Rupert Murdoch’s sons, to the company’s board.
Here are the key points in the breaking news story:
- Starboard Value called for the elimination of dual-class share structure, a system that allows News Corp’s founding family to maintain majority control despite owning only 12% of the voting shares.
- The firm claimed that the current share structure gives the Murdoch family too much influence over business decisions, stifling external oversight and accountability.
- Starboard Value argued that the dual-class structure undervalues the company, making it difficult for existing shareholders to gain control through a proxy fight or regular elections.
- The media conglomerate has been rocked by controversy in recent times, including a major telephone hacking scandal and a US$1.1 billion settlement with shareholders.
Reaction from the market:
As news of the move surfaced, News Corp’s (NWSA) stocks fell by 1% in early trading, reacting to the potential shake-up within the company.
The broader implications:
The Starboard Value move has significant consequences for the media industry:
- It highlights the issue of corporate governance and stakeholder accountability in publicly-listed companies.
- Could other companies with similar structures be forced to re-assess their governance structures and shareholder rights?
- Will this move lead to a shift away from dual-class share structures, potentially changing the calculus for investors and shareholders around the world?
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[World] – Activist investor Starboard Value said News Corp should eliminate its dual-class share structure, saying it gives too much influence to the family of Rupert Murdoch.
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