After a rival offered to purchase Move, News Corp.’s US digital real estate business, Rupert and Lachlan Murdoch came up with plans for a $28 billion ($40 billion) mega-merger of the family’s media businesses.
Last year, the father-son team unveiled a plan to merge News Corp and Fox, which analysts and commentators claimed was a part of the media tycoon’s efforts to concentrate power in the hands of Lachlan Murdoch.
Plans by Rupert and Lachlan Murdoch for a massive merger of News Corporation and Fox have been shelved. Bloomberg
The Murdochs announced the cancellation of the huge deal in a statement on Wednesday.
As per the News Corp proclamation, Mr. Murdoch’s choice to pull out the proposition “demonstrated that he and Lachlan Murdoch have decided that a mix isn’t ideal for News Corp and Fox investors right now.”
According to a person familiar with the situation, News Corp was recently approached by a rival about buying Move, the parent company of realtor.com’s US digital real estate division. This is when News Corp made the decision to abandon the deal.
According to the source, the business is far along in the process of selling US-based CoStar its 80% ownership in Move.
Move was purchased by News Corp in 2015 for $1.2 billion, becoming a part of the company’s larger portfolio of lucrative digital real estate assets, which is headed by REA, the owner of realestate.com.au. The remaining 20% of Move is owned by REA.
It is unknown whether News Corp’s discussions with CoStar over Move are connected to the demands of shareholders for the firm to sell or divest assets in order to free up value within the company and win their support for the first merger.
Major shareholders opposed Murdoch’s initial plan to combine News Corp with Fox, especially News Corp investors who demanded considerable changes, including the prospect of selling portions of the corporation.
Significant News Corp investors, such as US speculator T Rowe Price and Free Establishment Companions, have been the primary opponents, openly expressing misgivings about approving any consolidation.
Robert Thomson, the president of News Corp., reminded the workers on Wednesday that the company has not been involved in any covert activities since the consolidation proposal was initially publicised.
Mr. Thomson told colleagues, “We need to put a lot of effort into developing the premium publishing, news, entertainment, intelligence, and real estate offerings that have been the driving force behind our record revenues over the previous two years.
The cancellation of the merger raises a number of issues, including how the younger Murdoch might be given more authority and responsibility within media firms.
One of the people who voiced the Murdochs’ intention to sell or divest portions of the company was activist shareholder Irenic Capital, based in New York, which controls about 2.6% of News Corp’s Class B shares.
Irenic Capital co-founder Adam Katz expressed his appreciation for the decision to cancel the merger, but he urged that News Corp. look into the possibility of separating additional investor esteem around REA and Dow Jones, which distributes the Money Road Diary.
The images created a commotion in Murdoch’s circles, with some claiming they demonstrated his lack of plans for retirement or rest in his senior years.