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As Fox and News Corp Weigh Merger, an Activist Has Its Own Vision


An activist investor is pushing for a say within the proposed merger of News Corp and Fox, a deal put forth by Rupert Murdoch, the chairman of each corporations.

The investor, Irenic Capital Management, wants News Corp to explore splitting its online real estate listings unit from its other businesses, which include The Wall Street Journal, HarperCollins and The Latest York Post. It has requested a gathering with the special committee that the corporate formed to guage Mr. Murdoch’s proposal, said Adam Katz, one in all Irenic’s founders.

The fund, Mr. Katz said, is one in all the ten largest holders of News Corp’s Class B shares, which confer stronger voting rights than the more quite a few Class A shares. News Corp has a market capitalization of roughly $9 billion.

Irenic “looks forward to engaging with the corporate’s special committee to make sure it explores all paths to maximizing value, including a separation of its pre-eminent digital media and digital real estate assets,” Mr. Katz said.

News Corp’s real estate listings business features a 61.4 percent stake in REA Group value roughly $5.7 billion. The corporate, which is publicly traded in Australia, employs greater than 3,000 people. It operates the residential property website realestate.com.au, the business property website realcommercial.com.au and the share property website flatmates.com.au.

News Corp’s digital real estate business generated about $1.7 billion in revenue last 12 months, or about 16 percent of News Corp’s roughly $10 billion in revenue.

News Corp declined to comment.

Irenic, which was founded by Mr. Katz and Andy Dodge, believes the media and real estate businesses could be higher off as separate corporations. It contends that News Corp has grown right into a diversified business, with footholds in information services and digital subscriptions, which haven’t been properly valued by investors. Shares of News Corp have fallen about 33 percent over the past 12 months.


Oct. 13, 2022, 11:32 a.m. ET

Irenic’s push follows Mr. Murdoch’s proposal to merge the businesses nearly a decade after splitting them apart. Mr. Murdoch sees recent ways to integrate the businesses’ media properties, which include Fox News, The Wall Street Journal and the Fox broadcasting network, in addition to opportunities to avoid wasting costs.

Each corporations confirmed last week that they received Mr. Murdoch’s proposal, each saying that they had appointed a special committee to review any potential transaction. Robert Thomson, the chief executive of News Corp, told employees there was “no certainty” of any deal.

Shares of News Corp rose about 6 percent in aftermarket trading on Friday. Shares of Fox were down half a percent, giving it a market capitalization of about $17 billion.

Without Murdoch family support, Irenic may face an uphill battle. Rupert Murdoch’s son Lachlan is co-chairman of News Corp, alongside his father, in addition to the chief chairman and chief executive of Fox. The Murdoch Family Trust, which Rupert Murdoch controls along with his eldest children, owns 39.5 percent of the corporate. The family’s control stems largely from its ownership of its Class B shares.

Mr. Katz of Irenic is a former senior analyst on the hedge fund Elliott Management, one of the vital distinguished activist investors. One other activist fund, ValueAct, disclosed a position in The Latest York Times this 12 months and is pushing for the corporate to sell its subscription bundles more aggressively.

News Corp would still be a media colossus without its real estate business. The corporate’s other units include Dow Jones, which generated about $2 billion in revenue last 12 months from properties including The Wall Street Journal, and its information services unit, which incorporates the intelligence provider Factiva. Dow Jones generated about $433 million in earnings before interest, taxes, depreciation and amortization this past 12 months.

The remaining media businesses would come with The Latest York Post, The Times of London and the HarperCollins publishing business, which generated about $2.2 billion of revenue last 12 months.

Benjamin Mullin contributed reporting.

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