Rupert Murdoch abandons merger between News Corp and Fox after investor backtracking

Rupert Murdoch has given up his bid to reunite the two halves of his media empire.

Facing resistance among major investors, the 91-year-old tycoon and his son Lachlan on Tuesday notified the boards of directors of both Fox Corp. and News Corp. that the family was withdrawing its previous application to explore a combination of the two companies. Such a merger would have put Fox News and The Wall Street Journal under the same corporate roof.

The merger would also have strengthened the power of Lachlan Murdoch, the current CEO of Fox, as he would have run the combined company.

The Murdochs did not detail their reasons for abandoning the merger talks after less than three months of being instigated. A company statement said Rupert and Lachlan-Murdoch “determined that a combination is not the most appropriate combination for News Corp and Fox shareholders at this time.”

Major investment firms, including T. Rowe Price and Independent Franchise Partners, were reportedly skeptical that the combined entity would increase shareholder value. Gaining enough shareholders to approve the deal has been an increasing problem for the Murdoch family, which owns about 39% of the voting shares but less than 15% of the economic value of the two companies.

Another wrinkle has appeared recently. News Corp. has entered negotiations to sell one of its prized assets – its 80% stake in Move Inc. , the operator of the successful business, according to people familiar with the matter who are not authorized to speak publicly. Those people said News Corp wanted to focus on maximizing that potential multibillion-dollar deal. Late Tuesday, News Corp. Sales talks in a regulatory filing in Australia, saying it is “involved in discussions with CoStar Group, Inc. regarding a potential sale of Move, Inc.”

Rupert Murdoch wanted to remake the company he had spent more than 50 years building.

A decade ago, investors successfully pressured Murdoch to break up the company, arguing that its print publications, including in dozens of newspapers in Murdoch’s home country of Australia, devalued the company. The separation came on the heels of the British cellphone hacking scandal of newspapers owned by the Murdochs in London, which tarnished the family’s reputation and led to hundreds of millions of dollars in legal costs, including compensation to victims.

Now, the TV company likely has significant legal exposure. Dominion Voting Systems filed a $1.6 billion defamation lawsuit against Fox Corp. , alleging that Fox News perpetuated former President Trump’s false claims about “stealing” the election to calm viewers turned off by Biden’s early and nuanced call. Arizona won, putting him on the road to victory.

At a hearing last month, Dominion attorneys disclosed some of the testimony Fox News hosts and executives gave in affidavits in which they admitted to questioning claims made by Trump’s representatives. The lawyer quoted Fox News host Sean Hannity as saying under oath that he “didn’t believe it for one second.”

Dominion is heading to trial this spring.

Fox News asserted that its reporting of allegations of voter fraud during the 2020 election, as alleged by Trump and his attorneys, were newsworthy and protected by the First Amendment.

Marduk’s empire is smaller than it used to be. In 2019, Kotb sold much of the Fox Entertainment property to The Walt Disney Company for $71 billion. That left Fox Corp. with Fox News, Fox Business News, the Los Angeles-based Fox network, two cable sports channels, and the Tubi streaming service. Publication titles—including the Dow Jones, the New York Post, the Times of London, and the Sun tabloid—are at News Corp. , which also has Australian television assets.

The companies said in the statement that their board committees that are considering the merger proposal have been dissolved.

Times staff writer Stephen Battaglio contributed to this report.

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