Rupert Murdoch has pledged to follow the recommendations of special committees of the Fox Corp. and News Corp. boards on his proposal to recombine his media empire.
Fox Corp. said Tuesday that the special committee of the board named to evaluate the plan to bring it back together with News Corp. received letters from Murdoch, the chairman of the board, and the Murdoch Family Trust, which owns 39.6% of the company, promising to follow the group’s recommendations.
News Corp. released a similar statement on Tuesday.
Discussions began in October on bringing the media companies back together, nine years after they were split into separate entities in 2013.
Murdoch, 91, is the chairman of the board of Fox, which owns the namesake news outlet and television network, along with Fox Sports. His son Lachlan, 51, serves as the executive chair and CEO.
The elder Murdoch is also executive chairman of News Corp., while Lachlan serves as co-chairman of the parent company that runs the Wall Street Journal, New York Post and Harper Collins Publishers, as well as newspapers and other outlets in the U.K. and Australia. Fox Corp. in October picked five independent directors of its board to evaluate the possibility of bringing the two companies back together.
In its update Tuesday, the company said the committee “has not made any determination at this time, and there can be no certainty that the company will engage in such a transaction.”
News Corp., which has six independent directors looking into the possible realignment, issued a similar statement.
Some top shareholders, including Irenic Capital and Independent Franchise Partners, a London-based investment firm that holds about 6.5% of Fox stock, have objected to bringing the two companies back together. Independent Franchise Partners argues that any combination should involve the sale of key News Corp assets, to ensure the company’s stock is valued at more than $30 per share.
News Corp. shares were down 1.1% to $18.51 in late morning trading Tuesday, reflecting a gain of about 16% since the recombination discussions were made public.
Fox Corp. shares also slipped 1.1%, reflecting the broader market, to $29.81. They are flat since the possibility of a merger was floated.
In an investor call following the release of third-quarter results last month, Lachlan Murdoch said he wouldn’t talk about the possible combination, then went on to discuss the potential bringing the companies back together would provide in terms of scale as rivals snap up acquisitions. “Scale is important because what we’ve seen among our media peers is they are betting bigger. Scale lends flexibility in many ways, we continue to grow our business and look at M&A and be disciplined. Particularly in the next couple years.”