Rupert Murdoch is to move the official home and primary listing of his News Corporation media empire from its origins in Australia to the US.
Rupert Murdoch is to move the official home and primary listing of his News Corporation media empire from its origins in Australia to the US.
The company said the change of domicile would allow more American institutional investors to buy the stock and ought to raise the value of its non-voting shares, which are used for acquisitions.
However, Bruce Page, the author of a critical book on Mr Murdoch's business dealings, said the media tycoon was taking a risk by moving to the US. He said Mr Murdoch had used Australia's less stringent accounting rules to minimise the tax that News Corp paid over the years.
Mr Page, author of The Murdoch Archipelago, published last year, said: "It will be interesting to see how he [Mr Murdoch] stands up under the cold light of the SEC [the US regulator] ... He's always taken huge risks, but he's taken them knowing that the politicians would bail him out," Mr Page said.
A formal shift of News Corp's incorporation to the US will mark the end of an era that began more than 50 years ago when Mr Murdoch inherited a small South Australian newspaper business from his father.
News Corp now derives 75 per cent of its revenues and profits from the US. Its interests in the country were greatly boosted last year by the multi-billion dollar acquisition of DirecTV, a satellite distribution platform. Mr Murdoch said that meant there was a "compelling logic and timing" to the reorganisation. News Corp is already listed on the New York Stock Exchange and it also has its operational headquarters in New York.
The company's assets in the US include the New York Post newspaper and the Fox television network. In the UK, News Corp has a 34 per cent stake in BSkyB, the pay-television group, plus national newspapers including The Times and The Sun. Mr Murdoch, 73, is a US citizen and has lived in America since the 1970s.
Mr Murdoch insisted he was not cutting ties with Australia, where the company will retain a listing, and that all shareholders would benefit from the move of the domicile from Adelaide to Delaware. The primary listing will move to New York. "News Corp is and always will be a company with a proud association with Australia. News Corp's roots, heart and culture are unmistakably Australian," said Mr Murdoch, the company's chairman.
News Corp has two classes of shares, voting and non-voting. As a result of the change of domicile, the Murdoch family voting stake will be little changed, edging down from from 29.87 per cent to 29.45 per cent, worth some 8.8bn Australian dollars (£3.7bn).
The company said the change of status would lower its cost of capital, create greater liquidity in the US-listed shares, make the company eligible for inclusion in the leading US indices and close the discount at which the non-voting shares currently trade.
News Corp said its non-voting shares traded at a 10 to 20 per cent discount to the voting shares, compared with a 1 per cent discount that was typical for its peers. The company stressed the non-voting shares were its "acquisition currency of choice", sparking off speculation that more deals were in the offing.
The reincorporation, which will take place through a share-for-share exchange, also involves News Corp buying the 58 per cent of Australia's Queensland Press that is owned by the Murdoch family. Queensland's assets are valued at A$2.5bn.
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