Stock Spinoffs

With Shareholder Approval In Tow, News Corp Split On Track For June 28th

Spin Doctor
A few more milestones have been crossed on News Corp’s (NWSA) path to spinning off its publishing business. This past week, the company received shareholder approval in order to change its certificate of incorporation. The move was necessary in order to facilitate the spinoff of its publishing business, commonly referred to as the new News Corp.

A few weeks prior to receiving shareholder approval, the move was formally approved by the company’s board of directors. In addition to a share buyback plan at the new News Corp, the boards at both companies plan on adopting a ‘shareholder rights plan’ (the cleverly rebranded poison pill) post-spin. While the press release states the rights plan would not interfere with any merger, the plans were adopted ‘to protect the stockholders of the Company and the new News Corporation from efforts to obtain control of such companies that their respective Boards of Directors determine are not in the best interests of the companies and their respective stockholders.’ Currently expected to last for one year, the plan would effectively allow current shareholders to buy shares at a 50% discount if a new shareholder were to cross the 15% ownership threshold. Interesting that the company felt the need to do this and this should certainly ensure Rupert Murdoch’s control of both companies for at least a year.

The date of record for the transaction is set for June 21st with the distribution taking place on June 28th when shareholders are expected to receive 1 share of the new News Corp for every 4 shares of the current News Corp owned. The parent company will change its name to 21st Century Fox post-spin and trade under the ticker ‘FOXA’ (‘FOX’ for Class B shares) while the spinoff will keep the current ‘NWSA’ and ‘NWS’ (Class B) tickers.

For some more background information on the transaction, check out our earlier coverage of the transaction here, this recent Investor Day presentation and the Form 10.

Disclosure: Author holds no position in any stock mentioned.

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