It appears that the shine has worn off of News Corp.’s business dealings for two shareholders in Rupert Murdoch’s media empire.
The Amalgamated Bank of New York and the Central Laborers Pension Fund have filed a lawsuit in a Delaware court, alleging that the recent News Corp. deal to acquire Elisabeth Murdoch’s Shine Group for approximately US$675 million is “nepotism” and that the transaction makes “little or no business sense for News Corp.”
The lawsuit also alleges that Rupert Murdoch “constantly engages in transactions designed to benefit family members.” The acquisition of Shine is expected to close on March 31, at which point daughter Elisabeth will have a seat on the News Corp. board.
“News Corporation is the partner that enables us to maintain our aspiration to be best in class across all our sectors, and prepares and equips us for future growth,” said Elisabeth Murdoch when the deal was announced. In January, it was announced that Shine had retained JP Morgan to advise the company on strategic growth opportunities, and it was said that other companies besides News Corp. had expressed interest in acquiring the MasterChef producer.
However, The Guardian reports that lawyers for the Amalgamated Bank allege that the price of the deal is “far above a price any independent, disinterested party would pay for Shine.”
Amalgamated Bank is, through the lawsuit, seeking damages but the amount in the filing is unspecified. Illinois-based Central Laborers Pension Fund is asking to inspect the documents pertaining to the decision to purchase the prodco.
News Corp. has said, through a spokesperson, that the lawsuit is “without merit.”