Rupert Murdoch on Tuesday withdrew an offer to reunite News Corp and Fox Corp as the company also explores the sale of Move Inc., a realtor.com company, to CoStar Group, according to a regulatory filing and sources familiar with the process. com website operates.
Three sources familiar with the matter said News Corp was in talks to sell its stake in Move to Costar for about $3 billion.
Several top shareholders had publicly stated that they opposed the proposed Fox-News Corp combination, and on Tuesday News Corp said in a statement that it was “not optimal for the shareholders of News Corp and Fox at this time. “
The deal would have reunited the media empire that Murdoch split from nearly a decade ago.
News Corp on Tuesday confirmed talks to sell Move to Costar after Reuters reported, adding that there was no guarantee the discussions would lead to a transaction.
A CoStar spokesperson said the company “continually evaluates M&A opportunities across a wide range of companies to maximize shareholder value” and does not comment on “market rumors or speculation.”
No proposals were exchanged between News Corp. and Fox Corp. before the merger discussions were abandoned, according to sources familiar with the process, who said pushback from News Corp.’s shareholders may have contributed to the scrapping of those plans. played the part.
People familiar with the matter said the rally in News Corp’s shares in recent weeks meant Fox would have to pay a significant premium for the merger, something Murdoch did not believe he could justify to shareholders. .
market value
While Fox stock is down 5%, News Corp shares are up 25% since talks between the two companies were first announced on October 14. News Corp currently has a market capitalization of about $11 billion, while Fox is valued at more than $17 billion. Arab.
Sources said Murdoch proposed reuniting his media empire last fall, arguing that the publishing and entertainment companies he split from in 2013 could provide news, live sports and information to the combined company. I will give more scale.
Many people close to Murdoch saw the attempt to combine the media companies as part of 91-year-old Murdoch’s succession planning to consolidate power behind his son and Fox chief Lachlan Murdoch, a notion the company rejected. described as “absurd” in November.
Some of News Corp’s largest shareholders, including Independent Franchise Partners and T Rowe Price, blocked the idea.
Rupert Murdoch and his family trust control about 40% of News Corp and Fox. Had a deal gone through, they abstained from voting their shares when each company sought shareholder approval for the merger, due to a potential conflict of interest. It made the support of other major shareholders a condition for the deal.
‘right decision’
Activist investment firm Irenic Capital, which was among the first to say the prospect of a proposed reunion would undermine News Corp, on Tuesday applauded the decision not to proceed.
“This is the right decision,” said Adam Katz, chief investment officer at Irenik. “Looking forward, News Corp has an opportunity to create substantial value for its owners.”
News Corp agreed to buy Moov in 2014 for $950 million in a bid to diversify its digital real estate business, which at the time was primarily based in Australia.
Since then, News Corp investors have been asking the company to divest its digital real estate assets. Irenik publicly urged News Corp to sell its Dow Jones Media assets.
At a slide-deck presentation in November, Irenik estimated that News Corp’s 80% stake in Moov was worth $1.4 billion at $2.47 per share.
In a letter to News Corp staff on Tuesday, News Corp chief executive Robert Thomson said: “In my note to you in October, I stated that the Special Committee’s assessment would have no impact on our current operations; it That was indeed the case, and remains so after today’s announcement.”