RT Murdoch delivered a stinging blow to the UK yesterday as he outlined plans to split his businesses in two.
Asked about the ongoing investigations into several of News Corp’s British subsidiaries, including News International and BSkyB, Murdoch implied his UK-based assets are not crucial to the success of his company.
The News Corp boss said, “There are billions and billions of dollars, and if Britain didn’t want them, there are plenty of good places to put them here [in the US].”
But Murdoch averted fears that a UK exit might be on the cards, saying, “We’ve got things to be very bullish about in this country.”
After days of speculation, which drove up News Corp’s share price by almost 11 per cent, News Corp yesterday confirmed it will split its operations into two companies – a publishing division and a media and entertainment arm.
Rupert Murdoch, who will be chairman of both companies, said he will serve as chief executive of the media and entertainment arm. While a surprising announcement, as Murdoch’s heart is known to be in newspapers, the media and entertainment division will be the larger and more lucrative company.
The tycoon said the hunt is on for the publishing company’s chief executive, who is likely to be an internal applicant. Murdoch said it was “highly unlikely” that his son Lachlan would be put in charge of the division.
Other details of the plan were also vague, including how investors will be affected. News Corp said each current share will translate into one share of the new company, but declined to comment further.
The process is expected to take a year.
Murdoch defended the decision against allegations that the split is a result of the hacking scandal plaguing News Corp’s UK newspapers.
“It’s nothing to do with it at all. This is not any reaction. This is looking forward to what’s best for the company and for our shareholders,” he said.
Goldman Sachs, JP Morgan and Centerview Partners are said to be advising News Corp on its restructuring.
It is with much enthusiasm and personal pride that I share with you today's news regarding our plan to drive towards the next, transformative phase of this organisation you and I have built together into one of the largest, most innovative media companies of our time..
We will separate News Corporation into two global leaders in their own right – we will wow the world as two, as opposed to merely one...
Our publishing businesses are greatly undervalued by the skeptics. Through this transformation we will unleash their real potential... Our aim is to create the most ambitious, well-capitalised and highly motivated publishing company in the world... I believe our leadership is born out of a spirit of innovation. We have never accepted the status quo... Over the years, I have become accustomed to the noise of critics and naysayers... and pretty thick-skinned! Remember what they said when we started the Fox Network, Sky, Fox News and The Sun? These experiences have made me more resilient. And they should you, as well.
All the best,