News Corp. Board Approves Split, Sets Distribution

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 [e-mail]

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