) recently announced that its board of directors has consented to
the company's earlier decision of splitting its operations into 2
separate publicly traded publishing and entertainment
The diversification is expected to culminate on Jun 28, 2013.
Alongside, the company announced the board members for the
Post split, the Entertainment company (to be named 21
Century Fox) will encompass cable and television assets, filmed
entertainment, and direct satellite broadcasting businesses
including Fox broadcasting, cable network, Fox News Channel, the
20th Century Fox movie studio, BSkyB, Sky Italia, Sky
Deutschland, and pay-TV operations in Europe and India.
Additionally, the Publishing company (to be known as News
Corporation) will comprise publishing businesses, education unit
and the integrated marketing services business, with brands like
The Wall Street Journal
With regards to the separation, the company announced that the
shareholders of the company will receive one share in the new
publishing company for every four shares they hold in the
existing one. Moreover, to prevent unfavorable takeovers, News
Corporation adopted a poison pill provision, which will be
applicable for one year post split.
The split is expected to augur well for News Corporation,
which has been in troubled waters since the revelation of the
phone hacking scandal. In addition, it will definitely help the
company improve its financials.
It is, however, apparent that the entertainment company with
better prospects will have a greater chance of luring investors
than the publishing entity, which is grappling with declining
The company is fortifying its entertainment division by
focusing on enhancing its portfolio of regional sports channels
to solidify its Fox Sports Media Group's position in the
lucrative sports entertainment business, where it competes with
Walt Disney Company
) sports coverage network, ESPN.
On the other hand, News Corporation stated that its new
publishing company will start operations with $2.6 billion in
cash and no debt once its planned spin-off is complete. We
believe that with adequate cash, the new News Corporation will be
better positioned than its peers,
The New York Times Company
Gannett Co., Inc
) to make strategic acquisitions and expand its business.
In addition the company authorized a new $500 million share
buyback program for the newly created News Corporation.
Currently, shares of News Corp carry a Zacks Rank #3
DISNEY WALT (DIS): Free Stock Analysis Report
GANNETT INC (GCI): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis
NY TIMES A (NYT): Free Stock Analysis Report
To read this article on Zacks.com click here.