News Corp. (NWS: Quote,NWSA: Quote) said Thursday that it plans to pursue the separation of its publishing and entertainment businesses into two distinct publicly-traded companies. The company's board has authorized the management to explore the separation after a meeting on Wednesday.
The shares have gained since speculations emerged about the company planning to separate its less profitable newspaper business from the entertainment business, which generated the bulk of News Corp.'s revenue and operating profit in the first three quarters of this year.
News Corp. was looking to restructure its operations after its British newspaper division got involved in an embarrassing phone hacking scandal that finally led to shutting its 'News of the World' tabloid in July 2011.
News Corp. expects to complete the separation in about 12 months. After receiving final approval of the board of directors, the company will convene a special shareholder meeting to consider the transaction. However, News Corp. does not expect the meeting to take place until the first half of calendar 2013.
The separation may not affect Murdoch family's control on any of the businesses, as it owns roughly 40 percent voting stake in News Corp.
Rupert Murdoch, Chairman and CEO of News Corp., said, "There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognize their full potential - and unlock even greater long-term shareholder value."
The newly-created global media and entertainment company would consist of News Corp.'s cable and television assets, filmed entertainment, and direct satellite broadcasting businesses.
This includes 20th Century Fox film studio, Fox broadcast network, Fox News channel, Star, the National Geographic Channels, BSkyB, Sky Italia and Sky Deutschland, among others.
The new publishing company would consist of News Corp.'s current publishing businesses as well as its book publishing, education and integrated marketing services divisions.
It would include The Wall Street Journal, Dow Jones Newswires, HarperCollins, The New York Post, and The Daily, and Australian assets such as The Australian and The Herald Sun.
The Times of London as well as News Corp.'s integrated marketing services group and its digital education group, including Wireless Generation, will also be part of the new publishing company.
Upon closing of the proposed transaction, Rupert Murdoch will serve as chairman of both companies and CEO of the media and entertainment company. Chase Carey will serve as president and COO of the media and entertainment company.
News Corp. plans to assemble management teams and boards of directors for both businesses over the next several months.
NWS closed Wednesday's trading at $22.41. In Thursday's pre-market, the stock is down $0.02 or 0.09 percent to $22.39.
| || |
| To receive FREE breaking news email alerts for News Corporation and others in your portfolio|
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org