News Corp. is considering whether to split itself in two by separating its publishing assets from its entertainment businesses, according to
a report in the
Wall Street Journal,
a News Corp. publication. If the corporation were to split, the publishing company would be much smaller than the entertainment company, the
Journal
article said.
The report noted that the possibility of a split has been discussed within the company for years. News Corp. chairman Rupert Murdoch, who previously opposed such a move, recently has showed signs of changing his mind, the article said.
The
Journal
article said a split wouldn’t change the Murdoch family’s effective control of any of the businesses. The family owns about 40% of the voting shares of News Corp.
The
Journal
report said outside investors would welcome the move; the company’s TV and film assets are more valuable than its publishing businesses. Phone hacking by staff at the company’s U.K. newspapers led to a government investigation and international criticism, and U.K. government investigators are considering whether News Corp. should be permitted to keep its 39% stake in British Sky Broadcasting.
Analyst Alex DeGroote
told
Bloomberg Businessweek:
“I don’t think most corporate shareholders want to have exposure to U.K. newspaper assets. But I think Rupert Murdoch wants the assets, so there’s a conflict between what shareholders want and what Rupert wants, so one way around that is de-merge them.”
(Sources:
Wall Street Journal,
June 26, 2012;
Bloomberg Businessweek,
June 26, 2012.)
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