Rupert Murdoch has scrapped a proposal to combine Fox and News Corp after his attempt to bring the two halves of his media empire back together was resisted by shareholders.
Murdoch’s companies announced on Tuesday that the “special committees” established to explore the terms of the putative merger would be disbanded with immediate effect on the grounds that the proposal did not serve the interests of shareholders of Fox and News Corp “at this time”.
Fox and News Corp said Murdoch and his son Lachlan had determined the combination was “not optimal” for shareholders, a recognition of the reservations of big investors who feared the merger would fail to realise the full value of the assets.
In addition to scrapping the planned merger, News Corp is in advanced talks to sell its 80 per cent share of Move to rival CoStar, according to three people briefed on the negotiations.
The stake in Move, which operates realtor.com in the US among other property websites, is valued in the “low billions” of dollars, the people added.
A sale of the Move stake would be significant enough in size to have changed the calculus for the committees evaluating the merger of Fox and News Corp, one of the people said.
Murdoch, 91, in October proposed recombining the television group behind the Fox News cable channel with the owner of newspapers including The Wall Street Journal, in a deal that would have stitched back together the remains of his empire after nearly a decade apart.
Murdoch believed there were opportunities for collaboration across the business news brands of Fox and News Corp, including Fox Business, Fox News, Barron’s, MarketWatch and The Wall Street Journal, said people familiar with the plans.
However, he faced resistance from some large News Corp shareholders who thought that merged company would be worth less on the stock market than the individual groups.
News Corp owns about 80 per cent of Move, while the remaining 20 per cent is held by REA Group, the listed Australian real estate group that is also majority owned by News Corp.
CoStar is the Nasdaq-listed owner of brands including Apartments.com, LoopNet and Homes.com. The group is one of the biggest digital real estate businesses in America, with a market value of about $32bn.
Digital real estate has become a much larger part of News Corp’s overall business, growing from 5 per cent of total revenue in 2014 to 17 per cent in 2022. Revenues at the group’s digital real estate segment grew by 25 per cent to more than $1.7bn in the 2022 fiscal year. Move reported revenue growth of 11 per cent to $712mn last year.
News Corp in 2014 acquired Move for $950mn, a deal that chief executive Robert Thomson at the time described as an “exponential evolution” of the company’s print publishing business.