News Corp (NWSA) Shares Rally as Co. Confirms Its Considering a Split, Restructuring
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(Updated - June 26, 2012 10:07 AM EDT)
Hear ye! Hear ye! News Corp (Nasdaq: NWSA) might've gotten too big for 'er britches!
Following earlier rumors, News Corp has confirmed it is "considering a restructuring to separate its business into two distinct publicly traded companies." Monday's reports suggest Chairman and CEO Rupert Murdoch is mulling splitting the media giant into a segment focused on publishing and one focused on entertainment.
Though discussions between Murdoch and other executives are nearing final stages, nothing has been set in stone yet.
The decision comes as last year's phone hacking scandal all but put the kibosh on News Corp being able to keep its 39 percent stake in British Sky Broadcasting Group Plc. U.K. regulator Ofcom is currently looking into the matter to determine whether News Corp and its directors are fit to hold a broadcasting license. In February, the U.K.'s House of Commons Culture Committee determined News Corp "mislead" Parliament and Murdoch was "not a fit person to exercise the stewardship of a major international company."
Shareholders have been pushing for a split of the company, not wanting exposure to the U.K. newspaper assets. Murdoch, however, still wants to keep the assets.
The 39 percent holding of BSkyB currently carries a market value of £4.3 billion (about $6.71 billion at today's rates).
Following the split, the Murdoch family will retain control of both companies. News Corp currently derives about 70 percent of revenue from television. The conglomerate controls assets like Dow Jones, 20th Century Fox, the WSJ, and the New York Post.
News Corp shares are up nearly 8 percent amid the confirmation.
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Hear ye! Hear ye! News Corp (Nasdaq: NWSA) might've gotten too big for 'er britches!
Following earlier rumors, News Corp has confirmed it is "considering a restructuring to separate its business into two distinct publicly traded companies." Monday's reports suggest Chairman and CEO Rupert Murdoch is mulling splitting the media giant into a segment focused on publishing and one focused on entertainment.
Though discussions between Murdoch and other executives are nearing final stages, nothing has been set in stone yet.
The decision comes as last year's phone hacking scandal all but put the kibosh on News Corp being able to keep its 39 percent stake in British Sky Broadcasting Group Plc. U.K. regulator Ofcom is currently looking into the matter to determine whether News Corp and its directors are fit to hold a broadcasting license. In February, the U.K.'s House of Commons Culture Committee determined News Corp "mislead" Parliament and Murdoch was "not a fit person to exercise the stewardship of a major international company."
Shareholders have been pushing for a split of the company, not wanting exposure to the U.K. newspaper assets. Murdoch, however, still wants to keep the assets.
The 39 percent holding of BSkyB currently carries a market value of £4.3 billion (about $6.71 billion at today's rates).
Following the split, the Murdoch family will retain control of both companies. News Corp currently derives about 70 percent of revenue from television. The conglomerate controls assets like Dow Jones, 20th Century Fox, the WSJ, and the New York Post.
News Corp shares are up nearly 8 percent amid the confirmation.
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