News Corp-Fox merger plan faces opposition from major shareholder

News Corp-Fox merger plan faces opposition from major shareholder

November 23, 2022

(Reuters) -Independent Franchise Partners, a major investor in News Corp and Fox Corp, said on Wednesday it opposes media mogul Rupert Murdoch's plan to recombine the companies.

The London-based investment firm told a special committee of News Corp's board last month that it thinks a combination on its own would fail to realize the full value of the company, according to the Wall Street Journal, which first reported the news earlier in the day.

Independent, which owns about 7% of News Corp's Class A shares and 6.4% in Fox Corp, is the second investor to express dissent over the plan.

News Corp investor Irenic Capital earlier this week suggested a spin-off of the media company's digital real estate business or Dow Jones as an alternative to the merger.

News Corp declined to comment on the WSJ report, while Fox did not immediately respond to a Reuters request for comment.

Shares of News Corp rose about 1%, while those of Fox were up marginally in morning trade.

In October, Murdoch proposed to reunite his media empire nearly a decade after placing his print business in newly created public entity News Corp and the TV and entertainment businesses under 21st Century Fox.

Several analysts have raised concerns over the merger, saying that News Corp needs to simplify by selling off or spinning off assets instead of recombining with Fox.

Speaking to Reuters on Monday, Huber Research Partners analyst Craig Huber had said that Irenic Capital's displeasure with the merger would bring more investors forward.

"Maybe this will open up the floodgates," he had said.

(Reporting by Chavi Mehta in Bengaluru; Additional reporting by Yuvraj Malik; Editing by Devika Syamnath)

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