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“In withdrawing the proposal, Mr. Murdoch indicated that he and Lachlan K. Murdoch have determined that a combination is not optimal for shareholders of News Corp and Fox at this time,” according to a statement from News Corp.’s board. “As a result of this action, the Special Committee of the Board of Directors of News Corp has been dissolved.”
Fox released a substantially similar statement Tuesday, with the same “not optimal” language.
Murdoch initiated the merger discussions last October, when he sent a letter to the boards of Fox Corp. and News Corp. asking them to consider a combination of the companies. Both Fox and News Corp. formed special committees to examine a possible deal.
While Murdoch, through his family trust, effectively has control over the two companies, a merger would require a majority of non-Murdoch affiliated shareholders to approve. A handful of major shareholders, including T. Rowe Price and Irenic Capital Management, have since expressed concerns with the deal, particularly around the valuation of any potential deal.
The abandoned merger may stoke speculation about the future of both companies, as other suitors could see the failed deal as an opening for talks.
News Corp. owns The Wall Street Journal, Dow Jones, The New York Post, Australia’s Foxtel pay-TV service and other digital assets, while Fox Corp. owns the Fox broadcast network, Fox News, Fox Sports and other assets.
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