There were six brave not-for-profit Australian super funds – Unisuper,
MTAA Super, CARE Super, CBUS, HESTA and PSS/CSS – combined with a
handful of other funds from the US, the UK and the Netherlands, that
thrashed out today’s poison pill settlement with Rupert Murdoch, his
management underlings and John Thornton, the News Corp non-executive
director who led the negotiations.

Several other funds, mainly for-profit conglomerates, withdrew from the
Delaware court challenge for fear of brand damage that might have
stemmed, in part, from attacks in Murdoch media outlets around the world.
They therefore are missing out on the glory of what is a major
governance victory that recovers much of the ground lost when
News Corp’s institutional shareholders were hoodwinked into supporting
the move to America and lied to about the poison pill.

PSS/CSS holds the employee contributions from past and present federal
public servants and has a good record on corporate governance voting.
It should be getting the tens of billions going into the Future Fund,
but the Federal Government and its business supporters don’t like
institutional activism from funds not bedevilled by conflicts of

It’s hard to imagine Future Fund chairman David Murray, the former CEO
of CBA, committing to such an important legal case. And where were the
likes of AMP, MLC, Colonial First State and BT?

Phil Spathis and Michael O’Sullivan from the Australian Council of
Superannuation Investors should take a bow today for their victory and
these are the 12 specific terms of Rupert’s surrender:

1. The trial set down for 24 April 2006 in the Delaware Court of Chancery is postponed.

News Corp will put the extension of the Shareholder Rights Plan
(“The Poison Pill”) to a vote of stockholders at the October 2006 AGM.

If the stockholders vote against the extension of the poison pill,
the Board of News Corp retains the right to treat the vote as advisory,
and to proceed with the trial. This will be made clear to
stockholders before they vote.

The stockholders will vote on a Board proposal to extend the pill
for two years to October 2008, with the Board having the right to extend
for one more year to October 2009 if the Liberty situation has not
been resolved.

When the poison pill expires, no further poison pill can be adopted for a further period of nine months.

After that nine months, the company may institute a new poison pill
with a duration of one year. No rollover will be allowed without
stockholder approval until a further nine months have passed.

If during any such nine month period, a person acquired 5% of the
stock, or makes an offer for 30% or more of the stock or assets of the
company, the Board can institute a new poison pill for one year.

The company may institute a poison pill at any time with stockholder approval.

The plaintiffs will not solicit proxies or take other action to
defeat the poison pill at the October 2006 AGM. Plaintiffs will
vote as they see fit.

The public position of the plaintiffs and ACSI will remain, as it
always was, that the issue was not the merits of the poison pill, but
the right of shareholders to vote on its extension.

These provisions will expire in 20 years in October 2026.

12. In recognition of the benefits conferred by the settlement on all
shareholders, News Corp will pay the plaintiffs’ legal fees and costs.