News Corp. to pay dividends for first time since split
Rupert Murdoch's News Corp. said Thursday it will start paying a cash dividend for the first time since it split with 21st Century Fox two years ago.
The company, which publishes The Wall Street Journal and the New York Post, will start paying 10 cents a share starting the first quarter of fiscal 2016, with payment in the second quarter. Its fiscal year ends in June. The new gave the stock a bump in morning trade. It was up 1.58%, way ahead of the broader market.
"This decision by the Board is a sign of confidence in the state of our business and faith in our prospects for the future," said News Corp. CEO Robert Thomson in a statement. "The planned dividend, combined with our ongoing buyback and strategy of balancing capital returns with prudent reinvestment, puts News Corp firmly on track for long-term growth and value creation."
Meanwhile, a poison pill, formally called a shareholder rights plan, makes hostile takeovers nearly impossible. The previous two-year plan expired on Thursday. The new one runs through June 18, 2018 and would kick in if any party acquired more than 15% of more of the company's voting common stock – except for the company itself or members of the Murdoch family, which have already passed that threshold.
The company announced the extension in a filing Thursday with the Securities and Exchange Commission.
The rights have certain anti-takeover effects, causing substantial dilution to any person or group who tries to buy a chunk of voting stock and take over the company against the board's will – "even if the acquisition would be in the best interests of the company's shareholders." As a result, average stockholders don't tend to like poison pills very much.
But the plan "should not interfere with a merger or other business combination approved by the Company's Board of Directors," the company said in the filing.
In discussing the dividend, Thomson noted that a number of investments at News Corp. are starting to pay off. He called realtor.com "the fastest-growing digital real estate site in America.
"In addition, the integration of Harlequin with HarperCollins Publishers has created a powerful global and digital publishing platform," said Mr. Thomson. "These investments are already starting to pay off and we expect will bring long-term benefits to all stockholders."
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