(Bloomberg) -- Activist investor Starboard Value LP’s proposal to end the dual-class share structure at News Corp. got struck down during a vote at the media company’s annual meeting on Wednesday.
The Murdoch family controls about 41% of the voting shares at the parent of Dow Jones, the NY Post and other businesses, giving any proposal without their support a slim chance of passing. In a statement Wednesday the company said the nonbinding proposal had been “convincingly” defeated.
Starboard co-founder Jeffrey Smith argued in a letter to fellow shareholders in September that the dual-class structure provides the Murdochs with “outsized influence.” He referenced Rupert Murdoch’s decision to step down as chairman of News Corp. and Fox Corp. last year and leave his son, Lachlan Murdoch, in charge.
“This transition of power from Rupert Murdoch to his children has allowed for complicated family dynamics to potentially impact the stability and strategic direction of News Corp.,” Smith wrote.
Irenic Capital, another News Corp. investor, supported Starboard’s proposal.
The family is mired in a contentious legal battle between Rupert Murdoch and three of his other children over the family trust that owns the voting stock in News Corp. and Fox. Murdoch sought to change the trust’s conditions to hand sole control of his media empire over to Lachlan upon his death, rather than dividing it evenly among his four older children. Following arguments in a Nevada probate court in September, both parties are still awaiting a final ruling in the case.
News Corp.’s board of directors pushed back on Starboard’s proposal in September and said in a statement that the dual-class structure “promotes stability” and that the company “has thrived under the current structure.”
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