News Corp board gives the nod regarding US reincorporation

MUMBAI: Media conglomerate News Corporation has announced that a special committee of non-executive directors and the full board of directors have recommended the proposed reorganisation of the company.

It was in April that the company's CEO Rupert Murdoch had announced plans to shift its incorporation to the US from Australia.

News Corp expects the reorganisation to be completed by the end of the year. As reported earlier by the move to reincorporate in the US makes sense as 75 per cent of News Corp's revenues and profits are from US based businesses like Fox and now Directv.

However the proposed move will not result in a change in strategy. The reorganisation must now be approved by News Corp's shareholders.

As part of the plan, the board has approved of a deal under which News Corp. would acquire from the Murdoch family a holding company that owns News Corp shares and a 58 per cent stake in Australian newspaper publisher Queensland Press. News Corp already owns the rest of Queensland Press. This will result in the full consolidation of the Queensland Press publishing business,

The board, adviser bank UBS and the Murdoch family agreed to value the Queensland Press publishing business at 2.45 billion Australian dollars ($1.75 billion), after deducting about 500 million Australian dollars for debt.

After the deals are done, the Murdoch Interests, which are controlled by News Corp. Chief Executive Rupert Murdoch and his family, will own 29.48 percent of the voting shares of News Corp. US. This will be slightly less than the 29.87 per cent that they now own.

In a statement, the company said the deals would enhance demand for its stock and improve its performance by increasing the U.S. shareholder base and allowing the company to be included in U.S. stock indexes.

The deals will also simplify News Corp's structure and allow external reporting consistent with its peer group.

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