News Corp board approves plan to split $60bn media group
THE board of News Corp approved in principle splitting the $60bn media conglomerate into separate publishing and entertainment businesses yesterday.
News Corp's board, overseen by 81-year-old chairman Rupert Murdoch, decided to create two publicly traded companies.
Ever unpredictable, Mr Murdoch, after years of resisting calls by some large shareholders to spin out or sell off the company's slow-growth -- and in some cases, loss-making -- newspapers, decided to propose the move rather suddenly.
Details on the management structure are still to be resolved and formal approval by the board is still needed. The process is expected to take about a year, said the source, who did not want to be named as the decision had still to be made public.
Pressure on News Corp to get rid of the newspaper business was ramped up after a phone- hacking scandal tainted its British titles and forced the company to drop its proposed acquisition of pay-TV group BSkyB.
The 'Wall Street Journal', owned by News Corp, said one company will hold the entertainment businesses, like 20th Century Fox, Fox broadcast network and Fox News Channel, while the other will hold the publishing assets, which include 'The Times', 'The Australian', and HarperCollins book publishing. News Corp has already enlisted investment banks JP Morgan, Goldman Sachs and Centerview to advise on a process.
The board, long criticised for being dominated by the Murdochs, had been expected to approve the split.
It was not immediately clear if it will be put to a shareholder vote.
If it is, Mr Murdoch controls just under 40pc of the vote and would likely have no problem getting the extra 10pc needed. (Reuters)