News Corp proxy votes for US move

4.00pm

SYDNEY - News Corp Ltd shareholders overwhelmingly supported by proxy votes today a decision by Rupert Murdoch to shift the media group's corporate base to the United States.

News Corp will likely move to the US after proxy shareholders voted in favour of schemes of arrangement at the company's annual general meeting in Adelaide today.

News Corp needed support of 75 per cent of votes cast and 50 per cent of shareholders voting to allow it to reincorporate in the US state of Delaware.

The proxy votes for the share scheme meeting of ordinary shareholders was in favour, with 91.32 per cent votes cast for the move.

The company will retain a foreign listing on the Australian Stock Exchange but will seek to begin trading on the New York Stock Exchange on November 4.

At the AGM, News Corp chairman and chief executive Rupert Murdoch said the company's income growth forecasts remained achievable after its first quarter results.

News Corp said it was targeting operating income growth in the mid to high teens in 2004/05 and that "with our first quarter already behind us, those estimates remain achievable".

Mr Murdoch added that Sky Italia was on track for operating profitability in the first half of 2005.

"Indeed, if our current momentum continues, we think we are well on our way to creating another BSkyB in Europe's third most prosperous market," Mr Murdoch said.

"I'm happy to report that after a strong 2004, all of our operating divisions expect further earnings growth in fiscal 2005.

When we announced our 2004 results in August, we anticipated operating income at News Corporation would grow by mid to high-teens, in percentage terms.

"With our first quarter already behind us, those estimates remain achievable."

News Corp shares rocketed higher in opening trades after the proxy vote announcement.

At 10.20am AEST (1.20pm NZ time), News Corp shares were 34 cents, or three per cent, higher at A$10.78 ($11.62) while its preferred scrip was up 41 cents, or four per cent, at $10.48.

"It's seen as being a positive step," said CMC chief dealer Brian Griffin.

He also suggested that some investors had been planning to buy into News Corp but had been holding back until today's results.

"If you look at the price of News Corp over the course of the last month, maybe some people see it's gone down too far too fast," Mr Griffin said.

The share price had plunged 21 per cent since late June as institutional investors sold off in anticipation of the News Corp exclusion from Australia's key S&P/ASX200 index.

- AAP