Rupert Murdoch denies a “retreat” as Disney confirms buyout of 21st Century Fox assets for $52bn
Rupert Murdoch denied today that his family was “retreating” as his media empire was broken up by a $52bn (£39bn) sale of 21st Century Fox assets to Disney.
“I know a lot of you are wondering, why have the Murdochs come to such a momentous decision?” the recently married 86-year-old said on a call with investors yesterday. “Are we retreating? Absolutely not. We are pivoting in a pivotal moment.”
Murdoch and his family will own 4.25 per cent of the new Disney, equivalent to about $7bn at Disney’s current market capitalisation. They will also retain control of the spun-out “Fox”, comprising Fox News and Fox Sports, and will hold onto the separate News Corp.
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Under the terms of the deal, shareholders in 21st Century Fox will receive 0.2745 Disney shares for each of their ordinary shares.
But investors in Sky were jittery today, as the future of the broadcaster’s ownership was called into doubt. Shares in the company dropped 1.9 per cent to 990p.
While Disney will acquire 21st Century Fox’s 39 per cent stake in Sky, a process to acquire the remaining 61 per cent of shares is still under scrutiny from the Competition and Markets Authority.
Today 21st Century Fox said it was confident it would close the Sky takeover before the Disney merger, allowing Disney to take full ownership of the company. But if the Sky takeover is blocked, it is unclear what would happen next.
Max Gilbert, an analyst at New Street Research, explained: “It’s quite negative for the stock at the moment. Investors would have been hoping that Disney would have come in and say it intended to bid for the minorities as well, which would have meant if the the Fox Sky bid gets rejected there’s another chance.”
Questions were also looming over the future of Rupert Murdoch’s younger son James, currently chief executive of 21st Century Fox. Disney’s chief executive Robert Iger told investors yesterday that he would discuss “whether there is a role for him or not at our company” following the transition process.
Despite Murdoch’s insistence that the move was not a retreat, Labour’s shadow culture secretary Tom Watson – who has long been the Murdochs’ bete noire – said the deal marked “the end of an era” for the family.
“The decision to sell off key assets follows their UK business being engulfed in a phone hacking scandal, and ongoing revelations about sexual harassment at Fox News in the USA – scandals which have been in sharp focus recently thanks to the Murdochs’ attempted takeover of Sky,” he said.
“It’s important for Disney, a highly respected global media brand, that they do not allow the toxic corporate culture we have seen in the Murdoch empire to contaminate their business and tarnish their reputation.”
Read more: The CMA has pushed back publication of key findings on the Fox-Sky deal