Murdoch Set to Buy Out Other Fox Shareholders

10 January 2005

Rupert Murdoch's News Corporation plans to buy out all other shareholders in the Fox Entertainment Group in a deal reportedly worth $7 billion (€5.36bn; £3.74bn).

The move, approved Sunday night by the NewsCorp board, will make Fox a wholly owned subsidiary, increasing the Murdoch family' s leverage for future deals under the Fox banner. It may also help to explain the motivation of cable king John C Malone in building his stake in NewsCorp to a likely 17% [WAMN: 22-Dec-04].

Among Fox's many US assets are the Fox Broadcast Network, the eponymous movie studios and America's largest satellite operator DirecTV.

Murdoch's steely determination to build a stateside media mammoth led him to renounce his Australian citizenship for the US equivalent in 1986. And last year he completed the Americanization process - amid vociferous Aussie protests - by relocating News Corporation's corporate HQ from Adelaide to New York

The financial fraternity appear to approve of the latest deal.

Comments NewsCorp and Fox shareholder Mario Gabelli of Gabelli Asset Management: "The move underscores the simplification process: Mr. Murdoch's drive to make News Corporation a simpler and more shareholder-friendly U.S. company."

He is echoed by entertainment analyst Harold L Vogel: "This makes it easier for NewsCorp to do deals. It simplifies the structure and gives it full control over the deal making process."

But other observers are less euphoric at the apparent simplification process, recalling the Victorian proverb: 'He who rides a tiger is afraid to dismount'.

Data sourced from New York Times; additional content by WARC staff