News Corp. moves listing stateside

/ Source: The Associated Press

Rupert Murdoch’s media conglomerate News Corp. plans to shift its incorporation to the United States from Australia, in a move the company hopes will stimulate demand for its shares.

The company is effectively already run from the United States, where Murdoch and other senior executives are based. Murdoch gave up his Australian citizenship in 1985 to become a U.S. citizen.

News Corp., which owns the Fox television network, Fox News Channel, the New York Post newspaper and the Twentieth Century Fox studio in the United States, will also move its primary stock listing to the New York Stock Exchange from the Australian exchange by the year’s end.

The move reflects the company’s strong presence in the U.S. market, where it draws more than 75 percent of its revenues and profits. The move could also make it eligible for inclusion in major stock indices such as the S&P 500.

The company’s key U.S. entertainment assets, including the movie studio, TV stations and cable networks, are held by its U.S.-listed subsidiary, Fox Entertainment Group.

A primary listing in the United States is expected to significantly increase its shareholder base, the company said in a statement Tuesday.

“While historic gains in News Corporation stock have been impressive, our present status as a foreign issuer in the U.S. leaves many of the world’s biggest funds and investors unable to invest in News Corporation,” Murdoch told reporters in a conference call.

“That, we believe, is a prime reason our stock trades at a discount to some of our peers, despite our very strong financial performance in the past few years,” Murdoch said.

Despite its many U.S. media holdings, the company has retained its links with its Australian heritage, continuing to hold annual general meetings in the South Australian capital of Adelaide, where it has its registered office. The annual general meeting there later this year will be its last in Australia.

“I’ll miss the Adelaide [annual meetings] I guess, but we’re still going to have them there in the form of a big annual information meeting, which I certainly intend to chair,” Murdoch said.

A formal shift of its incorporation to the United States will mark the end of an era for News Corp. that began more than 50 years ago when Murdoch inherited a small South Australian newspaper business from his father, Keith Murdoch.

Under the proposed changes, existing holders of ordinary and preferred shares and holders of ordinary and preferred American depositary shares will exchange their equity for equivalent stock in a new News Corp., a Delaware corporation that will become the new parent entity.

The proposed changes are subject to shareholder approval, and Murdoch family interests won’t vote with other shareholders on any of the transactions, the company said.

News Corp. also owns Asia’s Star television network and newspapers around the world including The Australian and The Times of London.

The change is likely to have little effect on operations. The company’s Australia-listed shared closed up one Australian cent on the day at 12.16 Australian dollars ($9.15), and its U.S.-listed shares rose in afternoon trading on the New York Stock Exchange.