RUPERT MURDOCH confirmed yesterday News Corp, his $54 billion media conglomerate, will proceed with a plan to divide the company in two – separating newspapers like the Wall Street Journal, the New York Post and the Times of London from the fast-growing entertainment unit.
In a news release, the company said the split would be completed within the next 12 months, with Murdoch serving as chairman of both companies and chief executive of the entertainment business.
Chase Carey would remain chief operating officer of the entertainment group, which would include cable channels like FX and Fox News, the 20th Century Fox studio and Fox Broadcasting.
In the coming months, the board of directors would decide the leader of the publishing business.
“News Corp’s 60-year heritage of developing world-class brands has resulted in a large and unparalleled portfolio of diversified assets,” Mr Murdoch said in a statement.
“We recognise that over the years, News Corp’s broad collection of assets have become increasingly complex.”
He added: We determined that creating this new structure would simplify operations and greater align strategic priorities.”
News Corp shareholders would receive one share of common stock in the new company for each same-class share they hold in the current company, the news release said. Both companies would maintain their controversial dual-class share stock structure, which enables the Murdoch family to control nearly 40 per cent of the voting power.
The publishing company’s stock would be worth between 50 cents and $1.40 a share, according to Richard Greenfield, an analyst with BTIG Research.
In a memo to staff, Mr Murdoch cited the company’s “spirit of innovation” in the decision, which he viewed as an opportunity to free his beloved newspapers from their ugly stepchild status within the giant corporation.
“Our publishing businesses are greatly undervalued by the sceptics,” he wrote. “Through this transformation we will unleash their real potential, and be able to better articulate the true value they hold for shareholders.”
– ( New York Times Service)
