Fox CFO Steven Tomsic promised that “whatever happens” as its board considers merging with News Corp., creating value for shareholders “will be at the forefront of everyone’s mind.”
Last month, Rupert Murdoch asked special committees of Fox and News Corp. directors to evaluate re-merging the two companies. Since then, several shareholders on both sides have publicly protested that a new combination — bringing assets like Fox News, the Fox broadcast network, the Wall Street Journal and Dow Jones under a single umbrella — doesn’t make sense for either one.
“I think when the announcement came out in October, it was probably closer to the start of the process than the end of the process,” Tomsic said at the UBS media conference. “So I think that it is now in the hands of the Fox Corp. special committee, and News Corp. has its own special committee, so they will be very concerned and very deliberate and … will make the right decision.”
He said the Murdochs have a good track record – splitting off 20th Century Fox from the “old, old News Corp.,” resulting in a stand-alone Fox Corp. and News Corp., and taking “what is the value maximizing approach for the company and all its shareholders and I think those principles will continue to hold true.”
News Corp. and Fox split in two in 2013. Most of Fox’s entertainment assets were subsequently sold to Disney in 2019 for $71 billion in what now appears to be a particularly prescient deal as media valuations struggle.
Franchise Partners, one of the largest shareholders apart from the Murdoch family, with stakes in Fox and News Corp. of more than 7%, told the special committee set up by News Corp. that it doesn’t think a combination would realize the full value of both entities.
Irenic Capital, which owns about 2% of News Corp., blasted a potential merger with Fox, noting the latter’s advertising and legal exposure. A combination would create a more complex company and turn off investors, instead of boosting the company’s lagging stock price, it said in a letter to the News Corp. board, suggesting, instead, a spinoff of the digital real estate business or of Dow Jones.
Fox CEO Lachlan Murdoch declined to address the potential deal on the company’s quarterly conference call November 1.