By Liana B. Baker
Oct 8 (Reuters) - Proxy advisory group ISS has urgedTwenty-First Century Fox Inc shareholders to voteagainst the reelection of Chairman Rupert Murdoch and some otherboard members at an annual shareholders meeting this month,criticizing the company's adoption of a poison pill.
News Corp in May put in place a poison pillprovision for one year after the splitting off its media andentertainment businesses, seeking to prevent hostile takeovers.It will be triggered if someone acquires more than 15 percent ofthe stock of either company.
Saying the company should have put the plan to a shareholdervote, Institutional Shareholder Services called for anindependent board chairman to replace Murdoch.
It also recommended voting against his sons James andLachlan Murdoch, 21st Century Fox executive Chase Carey, as wellother nominees David DeVoe, Roderick Eddington, James Breyer,Viet Dinh and Alvaro Uribe.
But it endorsed independent directors Delphine Arnault,Jacques Nasser, and Robert Silberman.
Twenty-First Century Fox countered that the current boardhad delivered good returns for shareholders and had strengthenedcorporate governance.
"ISS' proxy analysis is completely out of touch with realitygiven the incredible value created under the leadership of 21stCentury Fox's returning director nominees," company spokesmanNathaniel Brown wrote in an email.
This year's shareholder meeting will be held on Oct. 18 inLos Angeles.
ISS' recommendations are a reversal from last year when itendorsed the controlling Murdoch family.
The year before that, the UK phone hacking scandal thatengulfed News Corp prompted the proxy advisor to urge investorsto vote against its directors. Shareholders reelected the boardthat year and failed to approve a proposal to oust RupertMurdoch from his chairman post.
ISS also said on Tuesday that the company's slow response toallegations of illegal phone hacking in United Kingdom may concern some shareholders. 21st Century Fox's Brown respondedthat ISS has a "disproportionate focus on historical matters."
News Corp has a history of potential takeovers. In 2004,Liberty Media Corp's John Malone quietly snapped up a 20 percentvoting stake in the company. The move prompted Murdoch to swaphis stake in DirecTV and other assets for Malone's shares inNews Corp.
The media and entertainment business of the former NewsCorporation has been trading separately from Murdoch'spublishing assets since the end of June. Rupert Murdoch controlsboth companies through his roughly 40 percent stake in Class Bvoting shares.
- Professional Services
- Rupert Murdoch
- News Corp