News Corp to spin off part of US entertainment empire

Click to follow
NEWS CORPORATION, the media conglomerate controlled by Rupert Murdoch, is preparing to float off a stake in its US entertainment, television and sports businesses in an attempt to place a market value on the assets and ease the pressure from institutional investors.

News Corporation yesterday said it planned to spin off a 20 per cent stake in a new company, to be called The Fox Group, which would include most of its US media businesses.

The move will allow US investors to gain exposure to a business with assets including the Twentieth Century Fox film group, the national Fox television network - which broadcasts popular shows such as The X-Files and Ally McBeal - as well as the Los Angeles Dodgers baseball team.

News Corp said the decision would allow "the investment community to better value the various entertainment assets and businesses which News Corp owns". It will separate News Corp's entertainment businesses from its book and newspaper publishing interests, which include HarperCollins and the Times and the Sun.

Rupert Murdoch has been under pressure from investors to boost the company's share price, which trades at a discount to other large media groups.

The group has attempted to boost its share price by announcing a share buy-back programme. But it remains dogged by a perceived lack of transparency in its businesses, which makes it harder for them to be valued. Investors are also concerned about who will succeed the ageing Mr Murdoch when he finally steps down.

News Corp said it expected the new company to file a registration statement with the US Securities and Exchange Commission within the next three months. The offering would be completed by the end of the year. The proceeds will be used to reduce debt and fund News Corp's share buy-back plan.

The Fox Group will consist of three segments: the Fox Filmed Entertainment Group, which includes Twentieth Century Fox and its film and video affiliates, and Twentieth Century Fox Television, which produces and distributes motion pictures and television programming; the Fox Television Group, which includes Fox Broadcasting Co and 22 owned and operated television stations; and Cable Networks, which includes interests in five pay cable television networks.