News Corp considers splitting into 2 firms
Source: Agencies |
June 27, 2012, Wednesday
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Print Edition
Print Edition
RUPERT Murdoch's News Corp confirmed yesterday that it is considering splitting into two publicly traded companies, driving shares to their highest level in 4 1/2 years.
The media conglomerate did not specify which businesses each company would contain. The Wall Street Journal reported late Monday that a split would put the entertainment arm, including the 20th Century Fox film business and the Fox TV networks, into a separate company from News Corp's newspaper and book publishing businesses.
The entertainment business would include the Fox News, Sports and Business channels, the report said. The publishing businesses include the New York Post, The Times and Sun of London, the Dow Jones news service and the HarperCollins publishing imprints.
News Corp's entertainment business accounted for about 75 percent of the company's revenue in the first three months of the year.
The Wall Street Journal is also owned by News Corp. The newspaper said in its report, which cited unnamed people familiar with the matter, that Murdoch has long opposed the idea but has warmed to it. His family controls about 40 percent of the company.
The discussions come as the company deals with an investigation into phone hacking by its UK newspapers. The phone hacking scandal has shaken Britain's media, police and political establishments.
Analysts believe investors and some management will feel emboldened by the hacking scandal to push for a change at the company, where Murdoch, 81, has long been seen as the main block to a spin-off of the newspapers.
Shares of News Corp, which is based in New York, gained US$1.46, or 7.2 percent, to US$21.54 in morning trading. Shares peaked earlier at US$21.75, their highest level since December 2007.
A final decision on the split has not been made, the paper said, and the Murdoch family will not lose its effective control of any of the businesses involved if the plan goes ahead.
News Corp's Chief Operating Officer Chase Carey said in May that the management and board had discussed spinning off its publishing business following investor pressure but that they did not have any plans to push ahead with it at the time.
The media conglomerate did not specify which businesses each company would contain. The Wall Street Journal reported late Monday that a split would put the entertainment arm, including the 20th Century Fox film business and the Fox TV networks, into a separate company from News Corp's newspaper and book publishing businesses.
The entertainment business would include the Fox News, Sports and Business channels, the report said. The publishing businesses include the New York Post, The Times and Sun of London, the Dow Jones news service and the HarperCollins publishing imprints.
News Corp's entertainment business accounted for about 75 percent of the company's revenue in the first three months of the year.
The Wall Street Journal is also owned by News Corp. The newspaper said in its report, which cited unnamed people familiar with the matter, that Murdoch has long opposed the idea but has warmed to it. His family controls about 40 percent of the company.
The discussions come as the company deals with an investigation into phone hacking by its UK newspapers. The phone hacking scandal has shaken Britain's media, police and political establishments.
Analysts believe investors and some management will feel emboldened by the hacking scandal to push for a change at the company, where Murdoch, 81, has long been seen as the main block to a spin-off of the newspapers.
Shares of News Corp, which is based in New York, gained US$1.46, or 7.2 percent, to US$21.54 in morning trading. Shares peaked earlier at US$21.75, their highest level since December 2007.
A final decision on the split has not been made, the paper said, and the Murdoch family will not lose its effective control of any of the businesses involved if the plan goes ahead.
News Corp's Chief Operating Officer Chase Carey said in May that the management and board had discussed spinning off its publishing business following investor pressure but that they did not have any plans to push ahead with it at the time.
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