THE board of Rupert Murdoch’s News Corporation yesterday approved plans to split the conglomerate into separate entertainment and publishing businesses.
The group set 28 June as the target date for completing the split, and said it would spend $500 million (£330m) on a share buyback programme at the publishing arm, which will retain the News Corp name.
The company holding its TV and movie assets will be called 21st Century Fox after the separation, which is expected to be approved by shareholders at a meeting on 11 June. Both companies will be publicly traded.
Murdoch will be chairman of both companies and chief executive of Fox.
The new News Corp will have $2.6 billion in cash when the spin-off is completed.
The stock repurchase programme sheds some light on issues that analysts have highlighted regarding the publishing company’s use of cash.
Murdoch and chief executive Robert Thomson will give more details at a conference next week. Under the ratios agreed for the split yesterday, current News Corp shareholders who own four shares will receive one share of new News Corp’s common stock.
The publishing spin-off includes News Corp’s newspapers such as the Sun, the Times, and Wall Street Journal as well as a cable network and pay-TV provider in Australia, book publisher HarperCollins and fledgling education company, Amplify.
The company also named directors to the board of the publishing firm including Murdoch’s sons Lachlan and James.