Shareholders sue Rupert Murdoch, News Corp. over Shine acquisition
News Corp. shareholders have sued Chief Executive Rupert Murdoch and the company over plans to acquire a London-based television production company owned by the senior executive's daughter.
In the suit filed Wednesday in a Delaware court, the Amalgamated Bank of New York and the Central Laborers Pension Fund alleged that News Corp.'s agreement to buy Elisabeth Murdoch's Shine Group for about $675 million was an act of "nepotism," according to a report by Bloomberg News.
Elisabeth Murdoch stands to receive $320 million in return for her 53% stake in Shine, along with a seat on News Corp.’s board, the complaint notes.
"Although the transaction makes little or no sense for News Corp., and is far above a price any independent, disinterested party would pay for Shine, it is unsurprising that the transaction was approved by News Corp.'s board," lawyers for the bank said in the filing.
News Corp. spokeswoman Julie Henderson called the suit "meritless."
When the conglomerate announced the deal last month, News Corp. noted the transaction would be subject to approval by the audit committee and the company's full board and receipt of an independent fairness opinion.
The transaction is expected to close March 31.
Founded by Elisabeth Murdoch in 2001, Shine has become one of Britain's largest independent production companies as a leading producer of such reality shows as "The Biggest Loser," "MasterChef" and "One Born Every Minute."
The pending acquisition would place a fourth Murdoch into a senior management role at the global media giant, and further consolidate the Murdoch family's control over News Corp. Elisabeth would join her brothers Lachlan and James on the board. The Murdoch family trust owns about 38% of News Corp.
Amalgamated's suit accused the senior Murdoch of treating News Corp. "like a wholly owned family candy store."
-- Dawn C. Chmielewski