Media mogul Rupert Murdoch has backed out of plans to merge News Corporation and Fox Corporation, which would have merged the publishing and television and entertainment businesses into one company, after they broke up in 2013. The respective shareholders of the group have already announced their refusal. Merger due to loss of market value.
In separate messages, the boards of directors of both companies confirmed they had received a letter from Rupert Murdoch withdrawing a proposal to explore a possible combination between News Corp and Fox Corporation.
In this sense, they pointed out that the non-agenarian businessman of Australian origin, who is a naturalized American, as well as his eldest son, Lachlan K. Murdoch, who takes over as Fox’s chief executive, “has determined that the combination is not optimal. For the time being for News Corp and Fox shareholders.” The action resulted in the dissolution of a special committee of the boards of directors of both News Corp and Fox Corporation.
Other sources, such as the Financial Times, indicate that the merger withdrawal will follow a possible sale of its 80% stake in Move to rival CoStar. Move is the parent company of a group of real estate web portals such as realtor.com in the US.
According to Bloomberg, the sale agreement values Move at about $3 billion. News Corp acquired Move in 2014 for $950 million. The company reported revenue of 712 million for the corresponding fiscal year 2022, an increase of 11%.
Shareholder and Family Matters
Among other things, Murdoch dismisses the problem: a large number of shareholders of both companies have warned that they would oppose the merger because they would lose market value with the merger.
Even the tycoon’s second son, James Murdoch, has written letters to the boards of directors of both companies questioning the proposed deal, Bloomberg reports from a person with knowledge of the correspondence.
James Murdoch stepped down from the News Corp. board in 2020 after a long row of fights and infighting among various family members over disagreements over editorial content and strategy. In fact, the merger announcement was assumed by the market as the eldest son, Lachlan K. Murdoch’s move to gain more control over the family business.
Fox Corporation operates the conservative Fox News Channel, as well as Fox Sports and Fox TV, and News Corporation is the parent of The Wall Street Journal, New York Post, HarperCollins and other publications.
Source: El Diario
