News Corp. shareholders file suit over Shine deal

AP News
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Posted: Mar 17, 2011 5:01 PM

Shareholders of News Corp. have filed a lawsuit against the company and its board over its recent deal to buy Shine Group, the U.K.-based television production company founded by CEO Rupert Murdoch's daughter, Elisabeth.

News Corp. agreed to buy Shine last month in a deal valued at 415 million pounds (about $670 million) including debt. The all-cash transaction will bring Murdoch's eldest daughter, at age 42, back under the News Corp. umbrella 11 years after she left as former managing director of Sky Networks.

The lawsuit was filed Wednesday in the Court of Chancery in Delaware by Amalgamated Bank and the Central Laborers' Pension Fund. Amalgamated, through investment funds, holds nearly 1 million shares of News Corp.

The lawsuit says Murdoch is "causing News Corp to pay $675 million for nepotism." Murdoch, who recently turned 80, is the controlling shareholder of News Corp. His daughter's planned return comes amid speculation about who will succeed him.

News Corp. spokesman Jack Horner called the suit meritless.

The Shine deal is expected to close in a few weeks.