Fox Corp. said chair Rupert Murdoch has dropped his plan to combine Fox with News Corp.
Fox said its board of directors received a letter from Murdoch and his son, Fox executive chair and CEO Lachlan Murdoch, withdrawing their proposal.
The Murdochs “have determined that a combination is not optimal for the shareholders of Fox and News Corp. at this time,” the letter said.
Fox had been part of News Corp. until 2013, when the Fox broadcast network and other television and studio assets were spun off into 21st Century Fox, while the company's publishing businesses remained with News Corp. 21st Century Fox was sold to The Walt Disney Co. in 2019, with some assets including Fox Broadcasting, Fox News Media and Fox Sports remaining to form Fox Corp.
Fox said that the special committee of the board that had been formed to evaluate the proposal has been dissolved.
Wall Street had been skeptical about Murdoch’s combo plan.
“We believe avoiding a recombination is a clear positive to Fox shares,” said Kutgun Maral of RBC Capital Markets. “We’ve previously highlighted our concerns over a potential deal , arguing that the modest benefits like collaboration across news or cost synergies would be outweighed by operational and strategic challenges arising from a more complex and diverse asset portfolio.”
But Maral warned that if Murdoch’s strategic goal was to scale up, there might be other merger and acquisition activity on the horizon.
“If the path to scale isn't through News Corp, then perhaps the Board will shift its focus to other targets across media or media-adjacent sectors (e.g., sports betting),” Maral said. “It’s tough to put the M&A genie back in the bottle, and we expect an even greater investor focus going forward on different alternatives for the company to scale up and/or separate its sports & entertainment assets.”
Fox stock closed at $30.63 a share, down 0.2% on Tuesday. News Corp. closed at $19.53, down 10%. ■
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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