Rupert Murdoch Drops Merger Idea

Rupert Murdoch called off his effort to merge the two parts of his media empire, News Corp  and Fox Corp., saying the transaction “is not optimal” for shareholders of the companies at this time, reports The Wall Street Journal.

Murdoch proposed reuniting News Corp and Fox last fall, nearly a decade after they split apart. In statements on Tuesday, the boards of the two companies said they received a letter from Mr. Murdoch withdrawing the proposal.

Fox Corp. owns Fox News and the Fox broadcast network, along with local TV stations and the Tubi streaming service. News Corp is the parent company of Dow Jones, publisher of The Wall Street Journal, as well as other assets including HarperCollins Publishers and news organizations in the U.K. and Australia.

News Corp has weighed other strategic options besides a merger with Fox Corp., including the sale of its digital real-estate assets, people familiar with the situation said. In a securities filing, News Corp said it is engaged in talks to sell Move Inc., which operates Realtor.com, to CoStar Group Inc. News Corp also owns a nearly two-thirds stake in Australian digital real-estate firm REA Group Ltd.

In an interview, CoStar Chief Executive Andrew Florance said the company, which is a major provider of data about commercial real estate, wants “to grow into the residential space.” To achieve that goal, CoStar is having “lots of conversations with lots of companies,” including News Corp, he said.

People familiar with Murdoch’s thinking about the merits of merging Fox Corp. and News Corp said that the companies could benefit from being bigger and that the combined entity would have had more balance-sheet strength to pursue acquisitions. The companies also could have joined forces in areas such as sports betting, the people said.

Some large investors were skeptical of the proposed transaction. In November, the Journal reported that Independent Franchise Partners, a London-based investment firm and one of the largest non-Murdoch holders of both News Corp and Fox, opposed the recombination, arguing it wouldn’t realize the full value of News Corp.

Murdoch is executive chairman of News Corp and chairman of Fox Corp. His son Lachlan Murdoch is co-chairman of News Corp and executive chairman and chief executive of Fox. The Murdoch family trust has a roughly 39% voting stake in News Corp and about a 42% voting stake in Fox Corp., according to securities filings from the companies.