Fox is back under the News Corp. umbrella

FEG clocks back in with Murdoch

NEW YORK — Fox Entertainment Group is back at home in Rupert Murdoch’s hen house.

With little fanfare or trouble, Murdoch’s News Corp. on Monday completed its acquisition of Fox Entertainment, meaning Fox won’t be listed on the New York Stock Exchange as of this morning.

Wall Streeters had complained it was too confusing to have News Corp. — now a corporate resident of the U.S. — and Fox Entertainment traded separately on the NYSE.

Fox’s divisions include 20th Century Fox, the Fox Broadcasting network and cable nets such as FX and Fox News Channel. Management structure at Fox Entertainment won’t change as a result of the absorption.

Murdoch spun Fox Entertainment off as a public U.S. company in 1998 so American institutional investors — which are barred from buying stock in a foreign interest — might stake a claim in his Australian-based empire.

At the time, News Corp. sold off an 18% stake in Fox Entertainment in an initial public offering.

Buying back that stock cost News Corp. between $6.2 billion and $6.3 billion.

Deal sweetener

After numerous shareholder lawsuits were filed objecting to News Corp.’s initial price offer, conglom sweetened its deal, with investors scoring an extra 7% to hand over their Fox shares.

Under the terms of the stock swap, News Corp. gave 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.

All told, 414,889,385 shares of Fox Class A stock were tendered in the exchange.

News Corp. shares were up 4¢ to close at $18.36 in trading Monday. In their final day of trading, Fox Entertainment shares were down 40¢ to close at $36.35.

With the buyback complete, Murdoch is now expected to turn his full attention to reclaiming John Malone’s stake in News Corp.

As Murdoch was reincorporating News Corp. to the U.S. at the end of last year, Malone’s Liberty Media snapped up enough additional voting stock to give Malone an 18% stake in Murdoch’s company.

That’s uncomfortably close to the Murdoch family’s 30% stake.

Murdoch and Malone haven’t had any discussions since late last year. Nor are any scheduled in the coming days. Murdoch, who is in India, is expected to return to New York in early April.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Scene News from Variety

Loading