The Hollywood Reporter (Weekly)
Why the Murdochs Won’t Remerge Their Empire
In October, Rupert Murdoch launched a trial balloon to reunite his
News Corp. and Fox Corp. companies to bring publishing assets like The Wall Street Journal together with TV properties like Fox News for the first time since the 2013 split.
That effort was officially scuttled
Jan. 24, when the elder Murdoch called a deal “not optimal” for shareholders. Through his family trust, Rupert has effective control over the companies — with Fox Corp. run by son Lachlan — but a merger would require approval from a majority of non-Murdoch-affiliated shareholders. Major shareholders, such as T. Rowe Price and Irenic Capital Management, expressed concerns about the proposed transaction and its potential valuation. And, sources tell THR, so did Murdoch’s other son, James, in letters to both firms’ boards.
“We believe the proposal was withdrawn due to opposition from large investors such as T. Rowe Price, which is the secondlargest shareholder of News Corp. (with an 18 percent position) behind the Murdoch family,” Cowen analyst Doug Creutz wrote in a research note. “T. Rowe indicated they believed that a combination would further undervalue News Corp. shares.”
It’s unclear what the lack of a marriage will mean for Fox Corp. — whose assets include the Fox broadcast network, Fox Sports and more — and which has on Wall Street been described as both an attractive takeover target and as potential suitor of other businesses. (News Corp.’s traditional media businesses, such as book publisher HarperCollins and its newspapers, had been seen by some as a drag on Fox, leading to the 2013 split.) As a potential buyer, the sports betting arena is often considered a likely area where Fox could look for growth via deals. “Back to the dating scene for Fox, or better off alone?” asked Wolfe Research analyst Peter Supino in a Jan. 25 note. “The rationale for a Fox/ News Corp. merger was that the combined balance sheets would provide enough scale to pursue other opportunistic deals, with sports betting called out as an example of assets that could leverage both companies’ strength in news and sports.”
Another potential windfall: Now News Corp., home to the New York Post, Dow Jones, Australian pay TV giant Foxtel and digital assets, is setting its sights on the sale of a business that some investors have been clamoring for. The firm said
Jan. 25 that it is considering offloading Move, which operates real estate listings site Realtor.com, to CoStar Group, which provides information and analytics to the real estate sector. News Corp. owns an 80 percent stake in Move, while Australia’s REA Group, of which News Corp. owns a majority, holds the other 20 percent.