Rupert Murdoch's News Corporation has been forced into instigating a last-minute "charm offensive" for investors after learning that its plan to move domicile from Australia to the US could be defeated.
Mr Murdoch himself, the chairman of News Corp, has attended some shareholder meetings or made phone calls to investors.
Two British institutional investors, Hermes and the Universities Superannuation Scheme (USS), are among the shareholders that are considering opposing the plan, which will be put to the vote this month. Hermes will hold a meeting this week with a representative from News Corp.
Grave misgivings about the proposed move have been expressed by an Australian investor organisation representing 32 superannuation investors, the ACSI, and international pension funds belonging to Corporate Governance International, which includes the powerful Calpers in the US, the Ontario Teachers' Pension Fund and Japan's Namco. Critics have said that corporate governance standards in the US are considerably more lax than those in Australia.
News Corp announced in April that it wanted to move domicile from Adelaide to Delaware. It said the move would improve the liquidity of its shares and bring the stock closer to the company's main operations, which are in the US - where its assets include the Fox television network and the New York Post newspaper.
To get through, the proposal needs 75 per cent support at an extraordinary general meeting, to be held in Adelaide on 26 October. The Murdoch family's 29.9 per cent shareholding cannot be voted.
Daniel Summerfield, the responsible investment adviser at the USS, said: "We support in principle the move but we are concerned that it will be done without preserving best practice." Shareholders are concerned in particular about the rights of minority shareholders - which they say are weaker in the US - and also the ability under US regulations to more easily create new classes of shares, which would be dilutive. Rights that Australian shareholders have which US ones do not include calling a generalmeeting and proposing resolutions. Also a majority of Australian voters can oust a director from the board - unlike in the US.
Colin Melvin, the director of corporate governance at Hermes, said: "Long-term shareholders asked the company to maintain the high standards of corporate governance if they moved and they said no. This raises suspicions whether the move is entirely to do with the benefits of increased liquidity."
A News Corp spokesman said: "We have always been confident that most shareholders would support the proposal as it is clearly in their interests."Reuse content