News Corp (Nasdaq:NWS) announced that it is possibly seeking a way to break itself in two. The announcement came only after the Wall St Journal which is owned by New Corp broke the story and started beating the jungle drums very hard. Not sure what News Corp thought they would achieve by not making the announcement themselves.
A couple if issues with that of course. The whole wire tapping governance issue with police investigations and some arrests is still very much around. Buying or selling other assets will not make it go away. It will probably just complicate the transaction as investigators politically motivated or just curious will keep asking everyone to open up their kimono on more than one occasion.
The whole BSkyB may benefit according to many commentators. At this point it is so politically charged, the BSkyB transaction is not likely to break Murdoch’s’ way. Doesn’t matter what other assets are sold off.
The whole move reminds me of a wolf whose paw is stuck in a steel trap. desperate and not able to conjure up a better strategy it starts to gnaw away at its paw in order to extricate itself from the problem at hand. except in this case the wolf is making an announcement that it plans to gnaw off its paw before it has actually done so. Probably with the secret hope of not really having to do so.
It’s all just a bit too surrealistic and Machiavellian. Simple valuation metrics will not work in this context.
George Gutowski writes from a caveat emptor perspective.
- News Corp ‘set to split in two’ (bbc.co.uk)
- Rupert Murdoch plot to break up his media empire (standard.co.uk)
- News Corp confirms possible split into two companies – live reaction (guardian.co.uk)
- News Corp shares jump at plans to split into two (belfasttelegraph.co.uk)
- Rupert Murdoch concedes News Corp faces divided future (guardian.co.uk)
- BSkyB investors underwhelmed by talk of News Corp split (guardian.co.uk)
- News Corp. Mulls Splitting in Two (naijaintellect.wordpress.com)
- Splitting Outlets Could Help News. Corp. Investors (npr.org)