Rupert Murdoch's News Corporation moved to take full control of the Fox television and film business yesterday by offering $6bn (£3.2bn) in shares to buy out the network's minority shareholders.
The offer is in News Corp non-voting shares, so the deal will not dilute the near-30 per cent interest in the voting stock held by the Murdoch family or the 18 per cent held by media mogul John Malone.
The deal was driven by News Corp's change of domicile and main stock market listing last year, from Australia to the United States. The company partially floated Fox in 1998 as a way of gaining a US listing. It no longer serves that function as the parent company now has a New York quote. Some US institutional investors cannot buy foreign shares.
David DeVoe, News Corp's chief financial officer, said: "Since the reincorporating of News Corp in the US, the logic for Fox no longer exists. We really took Fox public as a way to drive value into the stock."
The media industry had been expecting a deal between News Corp and Mr Malone's Liberty Media - since he aggressively increased his holding of News Corp voting shares last year, there has been speculation that he will either seek to buy or sell assets to Mr Murdoch. Analysts believe that despite yesterday's announcement about Fox, a deal involving Mr Malone's Liberty remains on the cards.
There has even been speculation that News Corp may move to buy out BSkyB, the British pay-television group in which it has a 35 per cent stake. Fox's assets include the Fox News Channel, Fox Network and the 20th Century Fox film studio. Hit shows have includedAmerican Idol and The Simpsons. Fox has emerged as a highly successful rival to long-established US television networks, such as CBS and NBC.
News Corp, which owns 82 per cent of Fox, has offered 1.9 of the company's Class A shares for each Fox Class A share, worth $5.85bn. That values Fox shares at about 7.4 per cent more than the closing price on Friday. Analysts said the offer was neither low-ball nor very generous. News Corp bought the Fox film business in 1985 and the following year it started to build the Fox television interests. News Corp made about $2.8bn when it listed Fox in November 1998.Reuse content