Prince Alwaleed bin Talal isn’t a man to back away from a fight. Last year when Forbes calculated that his wealth at “just” $20bn, the Saudi businessman insisted that he was in fact worth almost $10bn more. He is suing for libel.
So when he failed to help out Rupert Murdoch at an angry shareholders’ meeting last week, it wasn’t for fear of getting a bloody nose. So what was it about?
Murdoch has long been under pressure from some shareholders in News Corp, his best-known and biggest business, for supposed nepotism, and some poor decisions. Murdoch has faced criticism from shareholders before, but News Corp’s dual-class share structure – the Murdochs own 14% of the shares, but have 40% of the votes – has always meant he hung on.
Prince Alaweed also owns 6.6% of the stock, also in the super-shares. Together, then, the two men have control of the company. “We never vote against our partner Mr Murdoch,” bin Alaweed said last week. True, so far he hasn’t. But abstention can be just as damaging.
Is something afoot? Murdoch made a move last year that suggests it could be. He instigated a “poison pill” designed to deter takeovers, which says that in the event of anybody buying 15% of News Corp stock, existing shareholders would be issued new shares, thus diluting the raider’s holding.
This puzzled some at the time, with one calling it a “belt and braces” approach to protecting the Murdoch control, given that the dual-share structure does this already. But if he knew that bin Alaweed was no longer 100% behind him, it might make sense.
Does bin Alaweed have plans for News Corp? Is he waiting for something to happen? The big question at the business is which of Murdoch’s children will take over when he retires. Increasingly, shareholders are unwilling to accept family members who were implicated in the deeply damaging UK phone-hacking scandal.
At the moment the only way any of them will take over the hot-seat appears to be if bin Alaweed supports the choice. Perhaps the prince has a favourite. Perhaps he is simply enjoying the feeling of being the kingmaker.