Malone and Murdoch clash over poison pill arrangements

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The Independent Online

John Malone, the media mogul who has built an 19 per cent stake in Rupert Murdoch's News Corp, raised the stakes in the rivalry between the two men, by voting against the re-election of a string of News Corp board members.

The decision - which Mr Murdoch described as "not very friendly" - comes as the two sides continue to examine an asset swap that could see Mr Malone's Liberty take control of News Corp's US satellite business DirecTV. However, a deal seemed as uncertain as ever yesterday, after shareholders voted by a narrow margin to extend News Corp's controversial "poison pill" defence against a hostile takeover by Mr Malone.

While Liberty has spoken with increasing regularity about its willingness to consider an asset swap, most recently involving DirecTV, Mr Murdoch revealed that, although he was talking to Mr Malone, negotiations had not progressed to a point where legal advisers had become involved.

"We are not in any rushing hurry at all," he said. "We have just got the poison pill for another three years so we are relaxed."

Shareholders voted by 57 per cent to 43 per cent to extend the pill for two years, with a third year extension possible if Mr Malone is seen to be plotting an increase in his holding. The pill allows News Corp to issue shares to dilute Mr Malone's stake.

Mr Murdoch promised yesterday's vote in April to settle a US lawsuit brought by a group of international shareholders. The group - pension funds from the US, UK and Australia - had been furious that Mr Murdoch went back on an apparent promise to give shareholders a vote on the poison pill which it created when transferring its listing from Australia to New York in 2004.

Mr Murdoch controls 30 per cent of News Corp, but Mr Malone's presence on the share register has fomented uncertainty about the Murdoch family's long-term influence on a business empire that Mr Murdoch wants to pass to his children. Mr Murdoch said he did not know why Liberty withheld its votes for the four News Corp directors up for re-election, who included his son Lachlan and the defeated Spanish prime minister Jose Maria Aznar. "Liberty supported us last year and said what a good job the directors were doing, so I don't understand what has changed," he said. "It is not very friendly, but we are not losing any sleep over it."

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