SEVERAL leading American, European and Australian shareholders in News Corporation have filed a lawsuit against the media company, accusing it of reneging on a promise to seek shareholder approval before extending a “poison pill” takeover defence provision.

The 12 institutional investors, which include the Connecticut Retirement Plans and Trust Funds, UniSuper, of Australia, and a fund managed by Hermes Investment Management, of Britain, believe that News Corp, parent company of The Times, should have consulted them before extending the poison pill for another two years in August.

News Corp introduced the takeover defence last year after John Malone, a long-time shareholder through Liberty Media, suddenly raised his voting stake to 18 per cent. That made him the second-largest shareholder in the media group after Rupert Murdoch, News Corp’s chairman and chief executive, who controls 29.5 per cent of the company.

Mr Malone and Mr Murdoch have been in discussions since last year over Liberty’s stake but have been unable to reach an agreement. In the absence of an accord, News Corp’s board opted to extend the poison pill defence.

A spokeswoman for News Corp described the shareholder lawsuit as “baseless, frivolous and without merit”.

Shareholders represented in the lawsuit said that News Corp had promised them last year that it would seek investor approval before extending the poison pill. They say the pledge was made as a condition for their approval of News Corp’s plans to reincorporate as a US company. “Shareholders considered these assurances necessary before agreeing to reincorporation (in the US),” they said in a joint statement.

The lawsuit names News Corp along with Mr Murdoch, his elder son, Lachlan Murdoch, who resigned as News Corp’s deputy chief operating officer in August to pursue a career outside the company, and Peter Chernin, the company’s chief operating officer.

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