Shares of News Corp. rose, Fox shares fell as investors weigh in merger

A person walks past the Fox News headquarters at the News Corporation building on May 3, 2022 in New York City.

Alexi Rosenfeld | Getty Images

Stock news corporation up until Fox stocks tumbled on Monday as investors weighed the possibility of a recombination of Rupert Murdoch’s media companies, nearly a decade after they split.

On Friday, the companies announced they were exploring a merger, with News Corp. and Fox said they had set up ad hoc committees to look into the possibility.

The deal will solidify Murdoch’s leadership of Fox’s news, sports and business channels with his control of the News Corp. property, which includes the Wall Street Journal, Barron’s, New York Post and HarperCollins.

Market capitalization of News Corp. is about $9.45 billion, while Fox Corp. – about 14.76 billion dollars.

A source familiar with the proposal and not authorized to comment publicly told CNBC that the combined company may be in a better position to make acquisitions and that the scale of its combined assets could help it compete for digital advertising dollars with companies like Google. Apple and Amazon. The deal would require the approval of a majority of shareholders outside the Murdoch family trust, the source said.

Alphabet has a market cap of $1.32 trillion, Apple has a market cap of $2.29 trillion, and Amazon has a market cap of $1.15 trillion.

The Wall Street Journal also reported skepticism. from media executives, including some close to Fox and News Corp, that the recombination would have strategic advantages.

Activist investor Irenic Capital Management is also pushing for News Corp. separated its online real estate listing division from its other businesses. News Corp. owns several publications in this category, including and REA Group.

A source familiar with the matter told CNBC that Irenik is one of the top 10 shareholders in News Corp. Class B shares, which have stronger voting rights than its Class A shares. The source said Hayrenik would oppose the News Corp. with Fox if the value of the real estate division remains undervalued.

Representatives of Fox and News Corp. did not immediately respond to a request for comment.

Fox Class A shares fell more than 7% on Monday afternoon. Shares of News Corp. class A grew by more than 4%.

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