By Ben Fox Rubin, Saabira Chaudhuri and Melodie Warner
News Corp.'s (NWS, NWSA, NWS.AU) board approved the company's
separation into two publicly traded entities, moving another step
closer to splitting its entertainment businesses from the
publishing division.
The media company on Friday also outlined the terms of the share
distribution and announced the boards of directors for both
firms.
Last year, News Corp. decided to split itself after years of
shareholder pressure to spin off the lower-growth publishing side
of the business. The split is set for June 28 and still requires
approvals from shareholders and some regulators.
As part of the deal, the company's board approved the
distribution of all shares of the new News Corp., which will be the
publishing business, to the company's stockholders in a ratio of
one share of the new News Corp. for every four shares of News Corp.
Additionally, the board approved a $500 million stock-buyback
program for the new News Corp. following the separation.
The separation plan involves placing The Wall Street Journal,
Dow Jones Newswires, book publisher HarperCollins and several
Australian and British publications, among other divisions, into a
company that will retain the News Corp. name. Meanwhile, the Fox
broadcast and cable channels, 20th Century Fox movie studio and
other entertainment properties will be part of the newly titled
21st Century Fox.
News Corp. owns Dow Jones & Co., publisher of this newswire
and The Wall Street Journal.
"Today's announcement is a significant step in creating two
independent companies with the world's leading portfolios of
publishing and media and entertainment assets," said Rupert
Murdoch, who will serve as chairman and chief executive of 21st
Century Fox and executive chairman of the new News Corp.
"We continue to believe that the separation will unlock the true
value of both companies and their distinct assets, enabling
investors to benefit from the separate strategic opportunities
resulting from more focused management of each division."
Among the directors named to the boards of 21st Century Fox as
well as the new News Corp. are current News Corp. CEO Murdoch, and
sons James Murdoch and Lachlan Murdoch. The boards of both new
companies have 12 directors each. The current News Corp. board has
16 directors, including two directors emeritus.
Other directors for the new News Corp. include investment
company EXOR S.p.A.'s (EXO.MI) CEO John Elkann and Ana Paula
Pessoa, a partner at corporate communications firm Brunswick Group.
Also on the list is Masroor Siddiqui, the managing partner of Naya
Management LLP. Other directors named are Natalie Bancroft, Metcash
Ltd. (MHTLY, MTS.AU) Chairman Peter Barnes and former U.S.
Secretary of Labor, Elaine Chao. Another director named to the new
News Corp. board who isn't on the current News Corp. board is
Robert Thomson, chief executive of the new News Corp.
For 21st Century Fox, directors include Delphine Arnault, deputy
general manager at Christian Dior Couture since 2008 and a director
of Christian Dior SA (CDI.FR) since 2012, and Jacques Nasser,
previous CEO of Ford Motor Co. (F) from 1998 to 2001 and a director
of British Sky Broadcasting PLC (BSY.LN, BSYBY) from 2002 to
November 2012. Also included is Strayer Education Inc. (STRA)
Executive Chairman Robert Silberman.
Among other moves disclosed Friday, both News Corp. and the new
News Corp. will adopt stockholder rights agreements with a 15%
trigger as the companies believe there will be heavy trading of
21st Century Fox and the new News Corp.'s stock around the time of
the separation. Such plans are intended to prevent a change in
ownership.
News Corp. said the rights agreements will expire after one
year. The exercise price for the right of News Corp. and new News
Corp. will be $150 and $90, respectively.
News Corp.'s Class A shares were inactive premarket and closed
Thursday at $32.87. The stock is up 70% over the past 12
months.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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