The "poison pill" was due to expire in November, but when News Corp yesterday announced its better-than-expected results the board said it would be extended for another two years.
The strategy blocks investors from taking their voting shareholding beyond 15% and existing shareholders with stakes above 15% are prevented from adding to their holdings. Therefore, both Rupert Murdoch and Malone are barred from buying more shares.
Murdoch has wanted to try to regain some of the voting shares to secure his family's control over the media group. The decision to extend the "poison pill" makes it clear that Malone and Murdoch have failed to strike a deal. Murdoch and the family trusts under his control own 29.5% of the voting shares.
In a statement yesterday, News Corp said it would "extend the expiration of the shareholder rights plan until [Malone's] Liberty Media and [News Corp] reach a favourable resolution with respect to Liberty's ownership stake". In other words, until Malone is prepared to sell some of his voting shares back to News Corp.
Liberty sparked rumours that it may be interested in taking over News Corp last year when it began to increase its stake in the company, swapping non-voting shares for voting shares. However, News Corp has played down any speculation, saying that Malone's investment is a compliment to the company, and that Murdoch and Malone are old friends.
News International, which owns The Times, The Sunday Times, The Sun and News of the World, is the main UK subsidiary of News Corp.
News Corp yesterday reported a 38% rise in full-year net income to £1.19bn. Revenues in the fourth quarter were 12% higher than those for the same period last year. The media giant's 28% increase in earnings per share is likely to result in substantial bonuses for Murdoch and other top executives.
The company has been hitting the headlines over the last few weeks over the resignation of Lachlan Murdoch, Rupert Murdoch's eldest son, whom Murdoch senior had often said would succeed him.
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