) inched a step closer toward splitting its operations into 2
separate publicly traded publishing and entertainment entities as
the company's stockholders in special meeting consented to the
The separation 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 as the Publishing division
continues to remain a drag on its results.
Earlier, the company announced that its shareholders 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.
Following the division, the Entertainment company (to be named
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.
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.
Additionally, the Publishing entity (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
The 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.
Currently, shares of News Corp carry a Zacks Rank #3
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