Rupert Murdoch cancels Fox News merger proposal

Rupert Murdoch, chairman of News Corp and co-chair of 21st Century Fox, arrives at the Sun Valley Resort of Allen & Company’s annual Sun Valley Conference, July 10, 2018 in Sun Valley, Idaho.

Drew Angerer | Getty Images

Rupert Murdoch has withdrawn his re-merger proposal Fox Corp And News Corp.

Fox said Tuesday Its board of directors received a message Murdoch, its chairman, son and Fox CEO Lachlan Murdoch, said that he “determined that the combination was not optimal for the shareholders” of either company at the time.

merger was likely Face opposition of shareholders in recent months, who didn’t believe a merger would show News Corp.’s true value. If you merge with Fox.

News Corp CEO Robert Thompson told employees on Tuesday that the decision to cancel the proposed deal would have no impact on employees, according to a memo reviewed by CNBC. He also urged them to remain silent on the matter.

“As I advised at the outset of this process, it’s best not to speculate about speculation, and so if you hear from any media, shareholders, clients or others, please alert your business’s communications team,” Thompson wrote.

in OctoberThe companies said they had set up a special committee to look into the deal.

A combination of the two companies would have unified leadership in the Murdoch empire and cut costs at a time when audiences for both print and television media are shrinking. News Corp. owns Dow Jones, publisher of The Wall Street Journal. Fox, with the remainder of the $71.3 billion from the sale of Twenty-First Century Fox to Disney in 2019, owns right-wing networks. Fox News and Fox Businesswhich is a competitor to CNBC.

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Murdoch split the two companies in 2013. The Murdoch family fund controls about 40% of the voting rights of both companies.

At the time, the thinking behind the reunion was simply to give the combined company more scope to compete at a time when media companies are competing for subscribers and digital advertising spending, CNBC previously reported.

However, some shareholders, such as the Independent Franchise Partners, believed that a merger would not realize News Corp’s full potential value, and other alternatives, such as breaking up News Corp, should have been considered. The London firm is one of the largest shareholders in both News Corp and Fox, not Murdoch.

Irenic Capital Management was another shareholder who rejected the proposed merger, saying Fox did not serve News Corp’s strategic goals. Irenic and Independent Franchise both believe News Corp shares are undervalued. Class A shares of Fox closed at $32.67 on Tuesday, while News Corp’s Class A shares closed at $19.53.

In addition to Dow Jones, News Corp also owns real estate assets such as, book publisher HarperCollins, and the New York Post.

– CNBC’s Gabrielle Vonrouge contributed to this article.

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