News Corp., the parent company of Fox News and the Wall Street Journal, saw its stock rise this week, while the stocks of companies it’s exploring potential mergers with fell. The increase in News Corp.’s share price indicates investor excitement over possible deals with 21st Century Fox and Time Warner, but that excitement may be misplaced if those companies decide to not sell out to the larger company. If a deal between News Corp., 21st Century Fox, and Time Warner fails to materialize, News Corp’s share price will fall dramatically.
News Corporation stock.
increased as Fox Corp.
. The likelihood of Rupert Murdoch’s media firms reuniting almost ten years after they split caused shares to decline on Monday.
The businesses revealed their intentions to join on Friday, each stating that a special committee had been established to study the idea.
The agreement would strengthen Murdoch’s influence over News Corp.’s assets, including The Wall Street Journal, Barron’s, the New York Post, and HarperCollins, as well as Fox’s news, sports, and business channels.
Fox Corp. is worth roughly $14.76 billion, whilst News Corp. is valued at about $9.45 billion.
According to a source familiar with the proposal who was not authorised to speak to the media, a merged company might be better able to pursue acquisitions, and the size of its combined properties might enable it to compete with companies like Google, Apple, and Amazon for digital advertising dollars. According to the source, a majority of shareholders who are not a part of the Murdoch family trust would have to approve the sale.
Amazon is worth $1.15 trillion, Apple is worth $2.29 trillion, and Alphabet is worth $1.32 trillion.
The Wall Street Journal also noted media executives’ doubts about the recombination’s strategic advantages, including those of several who are close to Fox and News Corp.
Irenic Capital Management, an activist investor, is also urging News Corp. to separate its online real estate listings division from its other operations. Several magazines in this category are owned by News Corp., including REA Group and Realtor.com.
According to a person with knowledge of the situation, Irenic is among the top ten holders of News Corp.’s Class B shares, which have more voting power than its Class A shares. According to the source, Irenic would be against News Corp. and Fox joining together if the real estate division’s stock price remained low.
Requests for comment from Fox and News Corp. representatives were not immediately fulfilled.
On Monday, the price of Fox’s Class A shares fell by more than 9%. The Class A shares of News Corp. finished more than 3% higher.