Appeasing investors, Murdoch moves to split empire
By Yinka Adegoke and Kate Holton
NEW YORK/LONDON (Reuters) - Rupert Murdoch's News Corp took a major step in satisfying shareholders' concerns for a more growth-focused business with a plan to separate its publishing and entertainment assets, but an uncertain management structure for the two proposed companies raises new questions about a succession plan at the family-controlled media empire.
Shareholders have been pressing News Corp to get rid of its troubled newspapers business after a phone hacking scandal tainted its British newspapers and forced the company to drop its proposed acquisition of pay-TV group BSkyB. The move would be a clear signal that the company is distancing itself from its newspaper roots.
The proposed split into two publicly-traded companies sent News Corp shares up more than 8 percent, or $1.68, to $21.76 on Nasdaq -- their highest since 2007. The stock plummeted last year at the height of the hacking scandal, before recovering this year, helped by a $10 billion share buyback plan.
Several News Corp senior editors and publishers from around the world met with senior executives on Tuesday at the company's headquarters in midtown Manhattan to discuss details of the split, according to a person familiar with the matter. News of the meeting was first reported by the New York Times.
New Corp has retained investment banks Goldman Sachs and Blair Ephron's Centerview to handle the split process, according to people familiar with the plan. The possibility of breaking up News Corp has been under discussion for a "considerable period of time" but no final decision has been made, said a source with knowledge of the situation.
Cable business news network CNBC reported News Corp could announce details of its plans as soon as Thursday.
In a one-sentence statement, News Corp confirmed news reports that it is "considering a restructuring to separate its business into two distinct publicly traded companies." The conglomerate gave no other details.
Although The Wall Street Journal reported that the Murdoch family is expected to maintain majority control of both assets, the proposed split raises fresh questions about who will ultimately succeed Murdoch, 81, at the helm. Continued...