Rupert and Lachlan Murdoch have sent a letter to News Corporation withdrawing a proposal to explore a potential combination with Fox Corporation.
“In withdrawing the proposal, Mr. Murdoch indicated that he and Lachlan K. Murdoch have determined that a combination is not optimal for shareholders of News Corp and FOX at this time,” Fox Corp and News Corp said in separate statements on Tuesday.
Discussions between the two media companies began back in October – nine years after being split into separate entities in 2013 – with each company’s board of directors creating a special committee to explore a potential combination. As a result of the withdrawal, those committees have been dissolved.
News Corp’s businesses include The Wall Street Journal, Dow Jones, The New York Post, Realtor.com, HarperCollins Publishers, Australian pay TV company FoxTel and real estate advertising firm REA Group.
Meanwhile, Fox’s businesses include the Fox broadcast network, Fox News and Fox Sports. In 2018, Murdoch agreed to sell Fox’s entertainment assets to the Walt Disney Company in a deal valued at $71.3 billion.
The decision follows investor pushback from several firms, including T. Rowe Price, Irenic Capital Management and London-based Independent Franchise Partners.
Irenic, which holds approximately 2% of News Corp.’s Class B voting shares, argued that that News Corp.’s fundamental value is at least $34 per share and urged the company to consider spinning off its digital real estate and Dow Jones businesses.
Meanwhile, IFP, which holds about 7% of News Corp.’s Class A shares, 6.6% of its Class B shares and around 6% of Fox’s Class A shares, argued 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.’s Class A shares ended Wednesday’s trading session at $19.53 per share, while Fox’s Class A shares closed at $30.63 apiece.