News Corp. upping offer
NEW YORK — News Corp. on Thursday sweetened its offer to buy back outstanding Fox Entertainment shares.
In doing so, conglom is settling numerous class-action suits filed by Fox shareholders who said the initial price was too low.
Latest offer is expected to cost News Corp. about $6.2 billion, with investors scoring an extra 7% to hand over their Fox shares. Original offer would have carried a $6 billion pricetag.
Announcement virtually guarantees that Rupert Murdoch will soon have all rooms of his house under one roof. Fox’s stable includes 20th Century Fox, the Fox Broadcasting network and cable nets such as FX and Fox News Channel.
News Corp., a corporate citizen of Australia until this year, spun Fox Entertainment off as a public U.S. company in 1998 so that American institutional investors might stake a claim in Murdoch’s empire.
U.S. institutions can’t buy shares in an overseas conglom.
At the time News Corp. sold off an 18% stake in Fox Entertainment in an initial public offering. Now it’s taking that stake back.
Under the terms of the revised stock swap, News Corp. said it will give Fox shareholders 2.04 shares of News Corp. for every share of Fox Class A common stock, up from 1.90 shares of News Corp.
Fox Class A shares were up $1.44 in trading Thursday to close at $35.07. News Corp. shares were up 46¢ to close at $17.77.
Buyback offer, set to expire tonight at midnight Eastern time, has been extended to midnight on March 18.
News Corp. said it upped its offer following discussions with independent directors on the Fox board. Those directors are now expected to recommend to Fox shareholders that they accept the revised terms.
In detailing the new offer, News Corp. said it has settled shareholder lawsuits filed in Delaware Chancery Court, U.S. District Court for the Southern Court of New York and the Supreme Court of the State of New York County of New York.
20 suits filed
By some estimates, 20 lawsuits were filed, including 17 in Delaware.
Bringing Fox Entertainment under the News Corp. mantle will simplify News Corp.’s corporate structure now that it is a U.S. conglom. It also will address investor criticism that the separate listings for News Corp. and Fox Entertainment are confusing.
Resolving the Fox Entertainment buyback will also allow Murdoch to turn his full attention to resolving the matter of John Malone’s Liberty Media, which bought up additional shares of voting News Crop. stock just as Murdoch’s empire was relocating to the U.S.
Murdoch is said to find that holding untenable and will likely buy the stake back with cash, assets or a combination of both.