News Corp. to split
Thursday, June 28, 2012
NEW YORK (AP) — Calling it the next logical step in a near six-decade evolution, Rupert Murdoch’s News Corp. said Thursday it plans to split into two separate publicly traded companies.
Under the proposal, one company will operate as a newspaper and book publisher, while the other will be an entertainment company that includes the 20th Century Fox movie studio, the Fox broadcast TV network and the Fox News channel. It may take a year to work out the details.
The Murdoch family, which controls nearly 40 percent of the voting shares in News Corp., is expected to maintain control of both companies.
Rupert Murdoch said in a conference call with investors that a split would result in two strong companies that have more operational flexibility and be poised for greater growth.
“We’ve come a long way in our journey that began nearly 60 years ago with a single newspaper operating out of Adelaide,” Murdoch said, referring to the single Australian newspaper he inherited from his father and became the foundation for News Corp.
Investors have already given their blessing to the split, having pushed shares of the company’s Class B stock up 10 percent since the news of the plan broke early Tuesday. The shares edged down 15 cents to $22.26 in midday trading Thursday.
Under the current proposal, News Corp. shareholders will receive one share of common stock in the new company for each share of News Corp. that they currently hold. Each company would maintain two classes of stock.
Murdoch will serve as chairman of both companies and CEO of the media and entertainment company.
The company said it plans to put together management teams and boards for both businesses over the next several months.