Why Murdoch is second-guessing the Fox-News Corp merger
Rupert Murdoch has blocked the merger between News Corp (The Wall Street Journal, New York Post, among others) and the Fox television group both controlled by the tycoon. The funds he was against made Murdoch change his mind… Facts, numbers and comments
Everything remains as it is: Rupert Murdoch backs down on a proposal to merge Fox Corp with News Corp, in a deal that would have reunited the media empire he split nearly a decade ago.
The billionaire tycoon sent a letter to News Corp and Fox withdrawing his proposal to merge the companies. He indicated that he and his son, Fox Corp chief executive Lachlan Murdoch, had determined that the combination "wasn't optimal" for shareholders.
Murdoch proposed bringing News Corp. and Fox together last fall, nearly a decade after their split: In 2013, shareholders approved a plan to split the media giant's assets, which include The Times , The Wall Street Journal and some Australian publications, from its entertainment division. Murdoch said at the time that the separation would "unlock the true value of both companies and their distinct assets."
And now that value would not increase according to Murdoch by getting back together.
In reality, the doubts of some large investors weighed on the project. Such as Independent Franchise Partners and Irenic Capital who had declared their opposition to the merger. The green light for the merger would require a majority of votes from non-Murdoch family shareholders, which own about 39 percent of News Corp.'s voting stock and 42 percent of Fox.
Not only that, the offer was withdrawn as News Corp is in advanced talks to sell its stake in Move Inc. to CoStar, the company confirmed .
MURDOCH WITHDRAWS PROPOSAL TO JOIN NEWS CORP AND FOX
Murdoch has sent a letter to News Corp and Fox withdrawing his proposal to merge the companies, according to a regulatory filing. He indicated that he and his son, Fox Corp chief executive Lachlan Murdoch, had determined that the combination "wasn't optimal" for shareholders.
The Murdoch family holds about 40% of the votes at both Fox and News Corp, but any deal requires majority investor approval.
NEWS CORP INVESTORS WERE NOT CONVINCED
Bringing Fox and News Corp together would have given the combined companies greater scale to compete, but major News Corp investors balked at the idea.
In November, Irenic Capital Management said in a letter to News Corp that it would vote against the merger, arguing that the proposed deal would likely undervalue News Corp, The New York Times reported.
And the activist investment firm on Tuesday applauded the decision not to move forward, Reuters reported. “This is the right decision,” said Adam Katz, chief investment officer at Irenic. "As we look to the future, News Corp has the opportunity to create substantial value for its owners."
WHAT THE MEETING WOULD HAVE INVOLVED FOR FOX AND NEWS CORP
However, a combination of the two companies would have unified leadership in Murdoch's empire and cut costs at a time when audiences are shrinking for both print and TV. News Corp. owns Dow Jones, the publisher of the Wall Street Journal , and many other assets around the world, including HarperCollins publishing house and several news organizations in Australia and the United Kingdom . Fox Corp. owns the entire Fox network, with what was left over from the $71.3 billion sale of Twenty-First Century Fox to Disney in 2019, local television stations, and streaming service Tubi.
Specifically, “the planned merger would have combined the assets of highly controversial right-wing TV channel Fox News and TMZ with News Corp's news operations, which include the Times and Sun newspapers and websites in the UK, the Journal and the New York Post in the United States, and a group of Australian newspapers” comments the Guardian .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-murdoch-ci-ripensa-sulla-fusione-tra-fox-e-news-corp/ on Thu, 26 Jan 2023 06:48:34 +0000.