Media mogul Rupert Murdoch's News Corp. (NWS, NWSA) said Friday that its board of directors has approved the company's separation into two distinct publicly traded companies, 21st Century Fox and the new News Corporation.
The media and entertainment giant also announced appointments to the boards of directors of both companies, effective upon the completion of the separation that is set to occur on June 28, 2013.
Further, News Corp.'s board has approved the distribution of all shares of the publishing business, which will retain the News Corp. name, to the company's stockholders in a ratio of one share of the new News Corp. for every four shares of Class A or Class B common stock of News Corp. held by them. In addition, the board authorized a $500 million stock repurchase program for the new News Corp. following completion of the split.
New York-based News Corp. announced a plan in June 2012 to separate its publishing unit and entertainment business into two publicly traded companies. The move came after the company's British newspaper unit got involved in a phone hacking scandal that led to the closure of its 168-year old 'News of the World' tabloid in July 2011.
The independent media and entertainment company, christened 21st Century Fox, which will be home to a portfolio of cable and broadcasting networks and properties, including FOX, STAR, National Geographic Channels, film studio Twentieth Century Fox Film, and television production studios Twentieth Century Fox Television as well as Shine Group, among others.
Rupert Murdoch will serve as chairman and CEO of the proposed 21st Century Fox, while Chase Carey will be the company's president and chief operating officer.
Meanwhile, News Corp.'s newspaper and publishing assets will remain under the banner of the new News Corp. The publishing business will include newspapers in each of the U.S., Australia and the U.K., including The Wall Street Journal, The Times, and The Sun, as well as a portfolio of Australia media and sports businesses.
In December 2012, News Corp. named Robert Thomson CEO of the publishing company.
Rupert Murdoch, who will also serve as executive chairman of the new News Corp,. said, "Today's announcement is a significant step in creating two independent companies with the world's leading portfolios of publishing and media and entertainment assets. We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division."
Rupert Murdoch, James Murdoch and Lachlan Murdoch will be on the board of directors of both companies. 21st Century Fox's board of directors will also include Delphine Arnault, James Breyer, Chase Carey, David DeVoe, Viet Dinh, Sir Roderick Eddington, Jacques Nasser, Robert Silberman and Álvaro Uribe.
Delphine Arnault is the deputy general manager at Christian Dior Couture, while Jacques Nasser is a non-executive advisory partner of One Equity Partners LLP as well as a former CEO of Ford Motor Co. Robert Silberman is the executive chairman of Strayer Education.
The new News Corp. board will include José María Aznar, Natalie Bancroft, Peter Barnes, Elaine Chao, John Elkann, Joel Klein, Ana Paula Pessoa, Masroor Siddiqui and Robert Thomson.
Ana Paula Pessoa is a partner at PR agency Brunswick Group, while John Elkann is chairman and CEO of EXOR S.p.A and a one-time chairman of Fiat S.A. Masroor Siddiqui is the managing partner of investment firm Naya Management.
News Corp. stockholders will receive cash in lieu of any fractional shares of the new News Corp. Following the distribution of all of the shares of the new News Corp. common stock to the company's stockholders, the new News Corp. will be an independent publicly traded company, and News Corp. will not retain any ownership interest.
In advance of the separation, the board of directors of News Corp. as well as the current board of the new News Corp. has each decided to adopt stockholder rights agreements for both the companies. The rights agreements would expire one year after the date of today's announcement in the case of News Corp. In the case of the new News Corp., the rights agreement will expire one year after the date of the separation.
In Friday's regular session, NWSA is trading at $32.99, up $0.12 or 0.35 percent on a volume of 5.40 million shares. NWS is trading at $33.08, up $0.01 or 0.03 percent on a volume of 965,803 shares.
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