Saudi prince puts money on Murdoch

SYDNEY - Rupert Murdoch might be facing the wrath of some News Corp shareholders, but he has a huge supporter in billionaire Saudi prince Alwaleed bin Talal.

The prince's investment company Kingdom has converted a 3 per cent non-voting stake in Murdoch's global media and entertainment group to a 5.46 per cent voting share, vowing to help the media tycoon fend off any takeover bid.

The move reaffirms support Alwaleed offered Murdoch last November after US cable tycoon John Malone's Liberty Media quietly doubled its News Corp stake to a threatening 18 per cent.

"Last November, I said I had the utmost confidence in Murdoch and his succession planning. And, if necessary, the Kingdom companies would replace their non-voting shares with voting shares and potentially purchase additional shares in support of Murdoch and his plans," Alwaleed said yesterday.

Talks between Murdoch and Malone, to resolve Liberty's threatening presence on News Corp's share register, broke down last month. Malone has since said he would like a bigger slice of News Corp.

That threat prompted Murdoch to extend for two years an anti-takeover provision - a poison pill - that he set up last year after Liberty's raid on News Corp's voting stock.

The provision's extension infuriated many Australian shareholders who believed it had a one-year sunset clause and would not be revisited in similar terms if shareholders did not approve.

Local investors called the extension a breach of good corporate governance and promised to make it an issue at News Corp's annual meeting in New York on October 21.

Meanwhile, Alwaleed's public support sparked a buying spree in News Corp's shares yesterday.

Shaw Stockbroking dealer James Spiteri said: "I think the share price was strongly supported on the back of the Saudi prince's comments and his assessment of News Corp going forward."

The shares surged 60Ac yesterday before closing at A$22.45.

- AAP