(Republicaninformer.com)- Rupert Murdoch has pulled the plug on the planned merger between News Corp and Fox Corp, arguing the time isn’t right for shareholders.
It was reported in October that Rupert Murdoch and his son Lachlan, the CEO of Fox Corp, were seeking to reunite the parent company of Fox News with News Corp, the parent company of the New York Post and the Wall Street Journal, as well as HarperCollins Publishers and news organizations in the UK and Australia. The Murdoch family holds about 40 percent of the voting stock of each company.
Rupert Murdoch is the executive chairman of News Corp and chairman of Fox Corp. Lachlan Murdoch is the co-chairman of News Corp and the executive chairman and chief executive of Fox Corp.
But in late January, it was reported that the boards of both companies said they received a letter from Murdoch withdrawing the proposal.
For the merger to move forward, a majority of non-Murdoch family shareholders would have had to approve it.
Some large investors were skeptical of the proposed merger, however.
In November, the Wall Street Journal reported that the London-based Independent Franchise Partners, one of the largest non-Murdoch family shareholders for both News Corp and Fox, opposed the merger, arguing that it wouldn’t realize the full value of News Corp.
- Roe Price Group, a large News Corp shareholder, also raised concerns with the company and its board over how the merger would value News Corp.
In a letter to News Corp’s board, shareholder Irenic Capital argued that combining with Fox Corp “does not serve news Corp’s strategic goals.” Irenic Capital noted that “Fox is subject to litigation that may result in billions in costs.”
In a statement last Tuesday, Irenic Capital co-founder Adam Katz lauded Murdoch’s decision to drop the merger and said News Corp now “has the opportunity to create substantial value for its owners.”
With Murdoch pulling the plug, the special committees within the Fox Corp and News Corp boards set up to review the proposed merger have been disbanded, the companies said.