News Corp (NASDAQ:NWSA) is trying to give investors a better deal by paying a semi-annual cash dividend within the first quarter as well as a three-year extension of the poison plan.
It is called the poison plan because it opens up additional costs for any firm looking to initiate a takeover. This is a strategic measure put in place to discourage other firms from pursuing a takeover with News Corp. The expiry period has been extended up to June 18, 2018, instead of the initially expected expiration date on June 18, 2015.
Shareholders expect to receive a $.10 a share dividend starting at the end of the first half of the 2016 financial year, with June 30 as the exact date. Investors seemed to have a positive outlook on the new decisions. This is evident by the 2% rise in stock value in accordance with the dividend news release.
The dividend issue will be the first since the company divested its television investment in 2013. Since the separation, the television and film company has been issuing semi-annual dividends. The last dividend payout was made in March where investors received $.15 per share. The company’s share price has been 6% since the beginning of the year. Currently, the firm has 578.5 million unpaid shares while dividend costs will roughly be $57.9 million semi-annually.
According to News Corp (NASDAQ:NWSA)’s Chief Executive Officer, Robert Thomson, the decision made by the board with regards to the dividends and the poison plan is a sign of confidence. This means they believe that the company will perform better in the future. The new dividend puts the organization back on track towards value creation and long-term growth.
Mr. Thomson also stated that Realtor.com is one of the lucrative ventures likely to push the growth process. News Corp bought the real estate website for $950 million in 2014. Realtor.com is the fastest growing real estate website in the U.S. Its main competitor has been having a rough year, dropping more than 17% year to date.
