Rupert Murdoch scraps proposal to combine Fox and News Corp

Media empire was split by billionaire nearly 10 years ago

Rupert Murdoch had proposed reuniting his media empire last year. Reuters
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Rupert Murdoch on Tuesday withdrew a proposal to reunite News Corp and Fox Corp as the company is also exploring a sale of Move, which operates the website, to CoStar Group, according to a regulatory filing and sources familiar with the process.

Three sources familiar with the matter said News Corp was in talks to sell its stake in Move to CoStar for about $3 billion.

Several top shareholders had publicly said they opposed the proposed Fox-News Corp combination, and a News Corp statement said it was "not optimal for shareholders of News Corp and Fox at this time".

The deal would have recombined the media empire Mr Murdoch split nearly a decade ago.

News Corp confirmed the talks to sell Move to CoStar after Reuters reported it on Tuesday, adding that there was no guarantee the discussions would lead to a transaction.

A representative for CoStar said the company "continuously evaluates M&A opportunities across a broad range of companies to maximise shareholder value" and does not comment on "market rumours or speculation".

No offer was exchanged between News Corp and Fox Corp before merger deliberations were abandoned, according to sources familiar with the process, who said pushback from News Corp shareholders played a role in those plans being scrapped.

A rally in News Corp shares in recent weeks meant that Fox would have had to pay a significant premium for the merger to be agreed, something that the Murdochs did not believe they could justify to shareholders, people familiar with the matter said.

While Fox's stock is down 5 per cent, News Corp shares are up 25 per cent since the talks between the two companies were first announced on October 14. News Corp currently has a market capitalisation of about $11 billion, while Fox is valued at a shade over $17 billion.

Mr Murdoch proposed reuniting his media empire last year, arguing that together the publishing and entertainment companies he prised apart in 2013 would give the combined company greater scale in news, live sports and information, sources said.

Several people close to the Murdochs viewed the attempt to combine the media companies as driven by the 91-year-old’s succession planning to consolidate power behind his son and Fox head Lachlan Murdoch, a notion the company described as "absurd" in November.

Updated: January 25, 2023, 9:06 AM