News Corp Chairman and 21st Century Fox Co-Chairman Rupert Murdoch arrives at Sun Valley Resort for the annual Allen & Co. Sun Valley Conference on July 10, 2018 in Sun Valley, Idaho.
Drew Angerer | Getty Images
Rupert Murdoch withdraws proposal to reunite Fox Corporation When news corp.
Fox said Tuesday The board received a letter From Chairman Murdoch and his son, Fox CEO Lachlan Murdoch, who “decided the combination was not the best fit for shareholders” of either company at the time.
The potential merger has faced opposition from shareholders in recent months. They didn’t believe the merger would show News Corp.’s true worth if it merged with Fox.
News Corp CEO Robert Thomson told employees on Tuesday that the company’s decision to call off the proposed deal would not affect them, according to a memo seen by CNBC. He also urged them to keep their mouths shut on the matter.
“As I advised at the beginning of this process, it’s best not to speculate and guess, so alert your business’ communications team if you are contacted by the media, shareholders, customers, etc.,” Thomson said. is writing
In October, the companies announced that they had set up a special committee to review the deal.
Combined, the two companies would provide unified leadership in Murdoch’s empire and reduce costs at a time when audiences in both print and television media are shrinking. News Corp owns Dow Jones, the publisher of The Wall Street Journal. Fox owns right-wing networks Fox News and Fox Business with the remainder of the $71.3 billion sale of 21st Century Fox to Disney in 2019, and Fox Business is a competitor of CNBC.
Murdoch split the company in 2013. The Murdoch family trust controls approximately 40% of the voting power of both companies.
The idea behind the reunion at the time was to give the merged company enough scale to give it a competitive edge at a time when media companies are competing for subscribers and digital advertising dollars, CNBC previously said. reported.
However, some shareholders, such as Independent Franchise Partners, believe that the merger did not realize Newscorp’s full potential value and that other options, such as breaking up Newscorp, should have been considered. I was. The London firm is one of Fox’s largest shareholders other than Newscorp and Murdoch.
Irenic Capital Management, another shareholder who opposed the proposed merger, said Fox was not contributing to News Corp’s strategic goals. Both Irenic and the Independent Franchise believe News Corp stock is undervalued. Fox’s Class A shares closed at $32.67 on Tuesday, while News Corp’s Class A shares closed at $19.53.
In addition to Dow Jones, News Corporation also owns real estate assets such as realtor.com, book publisher HarperCollins, and the New York Post.
– CNBC’s Gabriel Von Rouge contributed to this article.