Your Lex column makes two mistakes (not a common occurrence) in their analysis of the News Corp sale of Direct TV to John Malone, in exchange for his holding in NewsCorp (¨News Corp/DirecTV¨ Financial Times December 7, 2006).
Lex refers to the minority shareholders as if they were such. The so-called minority shareholders, in fact own the majority of the shares of the company, even if you take away John Malone´s stake. Yet they behave as, are treated as and are discussed as minority.
It is beyond me why the majority of the company sits silent while a major asset is handed over to John Malone, a real minority shareholder, at a value that is clearly below its worth. Whatever the valuation put on the deal, it is clear that the asset will be sold cheaply. You just have to look at John Malone´s record to know that he is going to negotiate a good deal for himself, especially when he knows that the other side is desperate for a deal.
All this so that Rupert Murdoch can ensure his children take over the running of the company when he is gone.
The CEO of a company, albeit such an important one as Rupert Murdoch is to this company, openly engages in actions clearly to the detriment of the company for personal emotional reasons and the shareholders just lay down and play dead. What are shareholders thinking!
Onésimo Alvarez-Moro
See article:
Game over? After two years of shadow-wrestling Rupert Murdoch finally looks poised to get John Malone off his back – thanks in large part to the tax man.
Since Mr Malone’s Liberty Media snatched a 19 per cent voting stake in News Corporation, Mr Murdoch has sought a way to neutralise that threat to his family’s control. If the mooted deal happens, Mr Malone would swap his News Corp holding for that company’s 39 per cent stake in satellite operator DirecTV. While the two stakes are of broadly equal value, News Corp might throw some cash and sports networks into the tax-free deal, partly to reflect the rise in DirecTV’s shares on deal speculation and Mr Malone’s strong negotiating position.
See full Article (paid subscription required).
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