A actually walks past Fox News Headquarters at the News Corporation building on May 03, 2022 in New York City.
Alexi Rosenfeld | Getty Perceptions
Shares of News Corp. rose while Fox Corp. shares fell Monday as investors weighed the possibility of Rupert Murdoch’s environment companies recombining nearly a decade after they split.
The companies announced Friday that they were review a merger, with each saying it formed a special committee to consider the possibility.
The deal would consolidate Murdoch’s administration over Fox’s news, sports and business channels with his control of News Corp.’s properties, which include The Derange Street Journal, Barron’s, the New York Post and HarperCollins.
News Corp. has a market capitalization of around $9.45 billion, while Fox Corp. is value about $14.76 billion.
A source familiar with the proposal who was not authorized to comment publicly told CNBC that a combined company could be in a better position to pursue acquisitions and that the scale of its combined properties could help it vie for digital ad dollars with the likes of Google, Apple and Amazon. The deal would need a majority approval of shareholders who are not role of the Murdoch family trust, the source said.
Alphabet has a market cap of $1.32 trillion, Apple’s market cap is $2.29 trillion and Amazon’s merchandise cap is $1.15 trillion.
The Wall Street Journal also reported skepticism from media executives — including some near to Fox and News Corp. — that the recombination would have strategic benefits.
An activist investor, Irenic Means Management, is also pushing for News Corp. to split its online real estate listings unit from its other duties. News Corp. owns several publications in the category including Realtor.com and REA Group.
A source familiar with the count told CNBC that Irenic is one of the 10 largest holders of News Corp.’s Class B shares, which turn up with stronger voting rights than its Class A shares. The source said Irenic would oppose the grouping of News Corp. with Fox if the real estate arm remained undervalued.
Representatives from Fox and News Corp. did not immediately react to requests for comment.
Fox’s Class A shares closed down more than 9% on Monday. News Corp.’s Rank A shares closed up more than 3%.