Business Context and Reporting Period
Company: News Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: June 18, 2018
Event: Entry into a Material Definitive Agreement and Material Modification to Rights of Security Holders.
On June 18, 2018, News Corporation executed a Third Amended and Restated Rights Agreement with Computershare Trust Company, N.A. This action amended the existing rights agreement originally dated June 18, 2015, which was set to expire on the filing date.
Key Financial Metrics
This filing is a corporate governance report regarding a poison pill provision and does not contain financial performance data. The following metrics are not applicable or not provided in this document:
- Revenue, Profit, Cash Flow, Margins: Not reported in this filing.
- Debt and Liquidity: Not reported in this filing.
- Exercise Price: $90.00 per share of Series A Junior Participating Preferred Stock (subject to adjustments).
- Redemption Price: $0.001 per right.
Material Changes Versus Prior Period
The primary material change is the extension of the expiration date for the Company's stockholder rights plan:
- Previous Expiration: June 18, 2018.
- New Expiration: June 18, 2021 (at 5:00 P.M. New York City time).
- Trigger Threshold: The rights become exercisable if any person or group acquires beneficial ownership of 15% or more of the outstanding voting common stock.
Guidance, Outlook, and Management Commentary
Anti-Takeover Effects: The Rights Agreement is designed to cause substantial dilution to any person or group attempting to acquire a 15% or greater interest in the Company's voting common stock without Board approval. This may discourage acquisition attempts, even if potentially beneficial to stockholders.
Redemption and Exchange: The Board of Directors retains the ability to redeem the rights at $0.001 per right or exchange them for common stock or preferred stock prior to the rights becoming non-redeemable. This flexibility ensures the rights should not interfere with mergers or business combinations approved by the Board.
Exempt Persons: K. Rupert Murdoch, his immediate family, the Murdoch Family Trust, and other persons who beneficially owned 15% or more of voting common stock as of June 28, 2013, are exempt from being deemed "acquiring persons" unless they reduce their holdings below 15% or acquire additional shares outside of specific exceptions.
Risks and Contingencies: The filing notes that while the distribution of rights is not taxable, stockholders may recognize taxable income if the rights become exercisable or are redeemed. The filing text does not provide specific quantitative risk assessments beyond the dilution mechanism.
Important Facts for Investor Verification
- Verify the new expiration date of the poison pill provision is June 18, 2021.
- Confirm the 15% ownership threshold that triggers the rights plan.
- Note the $90.00 exercise price for the Series A Junior Participating Preferred Stock.
- Review the specific exemptions granted to the Murdoch family and existing major shareholders.
- Understand that the Board can redeem the rights at a nominal price ($0.001) to facilitate approved transactions.