Murdoch abandons Fox-News Corp merger after investors push back

Rupert Murdoch has dropped a proposal to merge Fox and News Corp after his attempt to bring the two halves of his media empire together met resistance from shareholders.

Murdoch’s companies announced on Tuesday that “special committees” created to explore the terms of the putative merger would be dissolved with immediate effect on the grounds that the proposal does not serve the interests of Fox and News Corp shareholders “at this time.”

Fox and News Corp said Murdoch and his son Lachlan determined the combination was “not optimal” for shareholders, an acknowledgment of the reservations of large investors who feared the merger would not realize the full value of the assets.

In addition to scrapping the planned merger, News Corp is in advanced talks to sell its 80% share of Move to rival CoStar, according to three people briefed on the negotiations.

The stake in Move, which operates realtor.com in the United States among other real estate websites, is valued at “low billions” of dollars, the sources added.

A sale of Move’s stake would be large enough to have changed the calculus of committees evaluating the Fox and News Corp merger, one of the people said.

Murdoch, 91, proposed in October to recombine the television group behind cable channel Fox News with the owner of newspapers including the Wall Street Journal, in a deal that would have reconstituted the remains of its worse after nearly a decade apart.

Murdoch believed there were opportunities for collaboration between Fox’s business information brands and News Corp, including Fox Business, Fox News, Barron’s, MarketWatch and The Wall Street Journal, people familiar with the plans said.

However, he faced resistance from some large News Corp shareholders who believed the combined company would have less stock market value than the individual groups.

News Corp owns around 80% of Move, while the remaining 20% ​​is owned by REA Group, the Australian listed property group which is also majority owned by News Corp.

CoStar is the Nasdaq-listed owner of brands such as Apartments.com, LoopNet and Homes.com. The group is one of America’s largest digital real estate companies, with a market value of around $32 billion.

Digital real estate has become a much larger part of News Corp’s overall business, growing from 5% of total revenue in 2014 to 17% in 2022. Revenues from the group’s digital real estate segment have increased by 25% to more than $1.7 billion. in fiscal 2022. Move reported revenue growth of 11% to $712 million last year.

News Corp in 2014 acquired Move for $950 million, a deal Chief Executive Robert Thomson described at the time as an “exponential evolution” of the company’s print publishing business.

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