News Corp-Fox merger plan opposed by big shareholder
Reuters
Published Nov 23, 2022 08:15AM ET
Updated Nov 23, 2022 12:01PM ET
By Dawn Chmielewski and Chavi Mehta
(Reuters) -A major investor in News Corp (NASDAQ:NWSA) and Fox Corp, Independent Franchise Partners, said on Wednesday it opposes Rupert Murdoch's plan to recombine the companies, raising a potential obstacle to the mogul's desire to reunite the media empire he separated nearly a decade ago.
The London-based investment firm told a special committee of News Corp's board last month that it thinks a combination on its own would fail to realize the full value of the company.
Independent, which owns about 7% of News Corp's Class A shares and 6.4% in Fox Corp, is the second investor to express dissent over the plan. The firm declined Reuters' request for comment.
News Corp investor Irenic Capital earlier this week suggested a spin-off of the media company's digital real estate business or Dow Jones as an alternative to the merger.
In October, Murdoch proposed to reunite the media companies he split in 2013, placing his publishing business in newly created public entity News Corp and the TV and entertainment businesses under 21st Century Fox.
Murdoch sold many of Fox's entertainment assets in 2019 to the Walt Disney (NYSE:DIS) Co in a $71.3 billion deal that left a smaller business focused on live news and sports.
Fox Chief Executive Lachlan Murdoch said during a 2019 investor day that he saw no logic in recombining News Corporation and Fox, arguing at the time that the split had benefits.
But Rupert Murdoch proposed just that in October, with sources saying the merger would provide greater scale to compete with media rivals.
Several people close to the Murdochs, however, viewed the effort to reunite the media companies as driven by the 91-year-old Murdoch’s succession planning to consolidate power behind his son Lachlan Murdoch, a notion the company described as "absurd" earlier this month.
Analysts have raised concerns over the merger, saying that News Corp needs to simplify by selling off or spinning off assets instead of recombining with Fox. Any deal would require the support of independent shareholders.
Speaking to Reuters on Monday, Huber Research Partners analyst Craig Huber had said that Irenic Capital's displeasure with the merger would bring more investors forward.
"Maybe this will open up the floodgates," he had said.
Get The News You Want
News Corp declined to comment on Independent Franchise's opposition, which was first reported by the Wall Street Journal. while Fox did not immediately respond to a Reuters request for comment.
Shares of News Corp rose 2% in late morning trade, while those of Fox were up marginally.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.