Rupert Murdoch abandons News Corp.-Fox merger after investors push back

Rupert Murdoch abandons News Corp.-Fox merger after investors push back

Rupert Murdoch has attempted to reunite the two halves of his media empire.

Facing resistance among major investors, the 91-year-old mogul and his son Lachlan approached the respective boards of Fox Corp and News Corp. that the family was withdrawing its earlier request to explore a combination of the two companies. Such a merger would bring Fox News and the Wall Street Journal under the same corporate roof.

A merger would consolidate the power of Lachlan Murdoch, Fox’s current chief executive, as he would manage the combined company.

The Murdochs have not detailed their reasons for dumping the merger talks less than three months after they were initiated. A company statement said Rupert and Lachlan Murdoch “are convinced that there is not an optimal combination for News Corp and Fox shareholders at this time.”

Major investment firms, including T. Rowe Price and Independent Franchise Partners, were reportedly skeptical that a merged entity would increase shareholder value. The Murdoch family, who own about 39% of the voting shares but less than 15% of the economic value of both companies, had more trouble winning over enough shareholders to approve the deal.

Another wrinkle has emerged recently. News Corp went. is negotiating to sell one of its prized assets — its 80% stake in Move Inc., operator of the successful website, according to people familiar with the matter who were not authorized to speak publicly. News Corp wanted to focus on maximizing that potential multibillion-dollar deal, these people said. Late Tuesday, News Corp. confirmed. the sale talks in a regulatory filing in Australia, saying it was “in discussions with CoStar Group, Inc. regarding the potential sale of Move, Inc.”

Rupert Murdoch wanted the company he spent more than 50 years building back together.

Ten years ago, investors successfully pressured Murdoch to break up the company, arguing that its print publications, including many of the newspapers in Murdoch’s native Australia, were devaluing the company. The breakup followed the British mobile phone hacking scandal by Murdoch-owned tabloids in London, which tarnished the family’s reputation and resulted in hundreds of millions of dollars in legal costs, including payouts to victims .

Now, it’s the TV company that could have significant legal exposure. Dominion Voting Systems has filed a $1.6-billion defamation lawsuit against Fox Corp., alleging that Fox News perpetuated former President Trump’s false claims about the “stolen” election to lure viewers who were alienated by the network’s early but accurate call for an end. Biden had to attract. Arizona won, putting him on the path to victory.

At a hearing last month, an attorney for Dominion revealed some of the testimony Fox News hosts and executives gave in depositions in which they admitted doubting the claims presented by Trump’s representatives. The attorney quoted Fox News host Sean Hannity as saying under oath that he “didn’t believe it for a second.”

Dominion’s case is set for trial next spring.

Fox News argued that its reporting on allegations of voter fraud during the 2020 election, as alleged by Trump and his lawyers, was meritorious and protected by the 1st Amendment.

The Murdoch empire is smaller than it once was. In 2019, the mogul sold many of Fox’s entertainment holdings to Walt Disney Co. for $71 billion. That left Fox Corp. with Fox News, Fox Business News, the Los Angeles-based Fox network, two cable sports channels and streaming service Tubi. The publishing titles – including Dow Jones, the New York Post, the Times of London and the Sun tabloid – reside in News Corp., which also has Australian television assets.

In the statement, the companies said their board committees looking at the merger proposal have been dissolved.

Times staff writer Stephen Battaglio contributed to this report.

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