Rupert Murdoch’s News Corp., moving to regain full control of its majority owned Fox television properties, is offering to buy the remaining publicly held shares of Fox Entertainment Group Inc. for stock valued at about $5.9 billion.
The exchange offer announced Monday would solidify Murdoch’s control over the Fox assets which include the Fox broadcast network as well as Fox news and sports channels, the Twentieth Century Fox movie studio and a controlling interest in satellite television giant DirecTV.
News Corp., which recently moved its base to the United States from Australia, also owns newspaper, book publishing, television and satellite TV assets around the world.
Under the deal announced Monday, News Corp. would offer to exchange 1.9 shares of News Corp. stock for each outstanding Fox Class A share that it doesn’t already own.
News Corp. currently owns approximately 82.1 percent of the equity and 97.0 percent of the voting power of Fox Entertainment. It owns about 59.1 percent of the outstanding Fox Class A common stock and all of the Fox Class B common stock.
Based on Friday’s closing prices, the company said the exchange offer represented a premium of approximately 7.4 percent for the Fox Class A shares.
There are about 175 million Fox Class A shares that are not held by News Corp. Fox A shares closed at $31.22 on Friday on the New York Stock Exchange, valuing the Fox shares News Corp. doesn’t own to $5.46 billion.
The 7.4 percent premium that News Corp. said its offer would provide values those shares at nearly $5.9 billion.
In early trading on Monday on the New York Stock Exchange, News Corp. shares were down 18 cents at $18.05 while Fox Entertainment shares rose $2.68, or 8.6 percent, to $33.90.
The company said it plans to file details of the offer with the Securities and Exchange Commission and begin its exchange offer Monday.
News Corp. expects that the Fox board will form a special committee of Fox directors who are not directors or executive officers of News Corp. to consider the proposal and make a recommendation to Fox shareholders regarding the deal.