INVESTORS applauded News Corp yesterday, sending its shares up more than eight per cent, after the media giant confirmed it is mulling the prospect of splitting its empire in two.
“News Corp... is considering a restructuring to separate its business into two distinct publicly traded companies,” the firm said in a statement.
The potential move, understood to entail the separation of News Corp’s entertainment and publishing arms, pleased shareholders who have long called for Rupert Murdoch to chuck his less profitable newspaper unit.
News Corp’s publishing assets – including the Times, the Sun, the Wall Street Journal and HarperCollins – brought in revenues of $8.8bn (£5.6bn) last year.
The significantly more lucrative entertainment arm – which includes BSkyB, 20th Century Fox and the Fox TV networks – generated $23.5bn.
The move could be an attempt to shield BSkyB from the phone hacking scandal which has plagued News Corp’s UK publishing unit since last summer, and has been pegged by some analysts as an attempt by the media behemoth to resuscitate its failed bid for the 61 per cent of BSkyB it does not already own.
Shares in the British satellite business gained 2.7 per cent yesterday after News Corp’s confirmation.
News Corp president Chase Carey hinted earlier this year that the board was considering the possibility of selling the group’s newspaper unit.
But it is understood the Murdochs would retain control of both companies if the division were to occur.
An official announcement could come as soon as tomorrow, according to reports.