Rupert Murdoch Calls Off Proposed Fox News/News Corp Merger

Rupert Murdoch retracted his offer to recombine Fox Corp News Corp.

Fox announced Tuesday its board received a letter from Murdoch, its chairman, and his son and Fox CEO Lachlan Murdoch that “determined that a combination is not optimal for the shareholders” one of these companies at the moment.

News Corp’s withdrawn proposal came as the company was in advanced negotiations to sell its stake, Move Inc. (the parent company of Realtor.com), to a commercial real-estate company CoStar GroupAccording to someone familiar with the matter, it is.

News Corp Tuesday confirmed in a regulatory filing that they are in talks with CoStar over a possible sale to its stake in Move.

“Any potential transaction would support News Corp’s strategy to optimize the value of its Digital Real Estate Services segment, while strengthening Realtor.com‘s competitive position in the market,” In the filing, News Corp stated that. News Corp stated in the filing that it was not certain that a transaction would be reached through the talks. It also said that it could not comment on the matter further at this time.

A spokesperson for CoStar Group said Tuesday that the company had released a statement. “continuously evaluates M&A opportunities across a broad range of companies to maximize shareholder value.”

A spokesperson for News Corp didn’t respond when asked. The first to report on the deal negotiations was Reuters.

News Corp is not only Wall Street Journal Publisher Dow Jones but also owns assets like HarperCollins book publisher and the New York Post. In 2014News Corp bought an 80% share in Move. The remaining 20% stake was acquired by REA Limited Group, an Australian property business in which News Corp has a 61.6% share.

According to a memo by CNBC, Robert Thomson, CEO of News Corp, told employees Tuesday that the decision to cancel the deal would not have any impact on them. He also advised them to remain silent about the matter.

“As I advised at the beginning of this process, it is best not to speculate on speculation, and so if you do hear from any media, shareholders, customers or others, please alert the communications team in your business,” Thomson wrote.

In OctoberThe companies claimed that they had established a special committee to review the deal.

The combination of these two companies would have provided Murdoch with a unified leadership team and helped to cut costs in a time where TV and print audiences are declining. Dow Jones, Wall Street Journal publisher, is part of News Corp. Fox, using the proceeds from the sale of $71.3 billion Twenty First Century Fox to Disney in 2019, has right-wing networks Fox News and Fox BusinessCNBC’s competitor is the.

Murdoch had divided the companies up in 2013. About 40% of voting rights in both companies is held by the Murdoch family trust.

CNBC reported previously that the idea behind the reunion was to allow the merged company to compete more effectively in an era when media companies are competing for digital advertising spend.

The merger was possible faced opposition Recent shareholders didn’t believe that a merger with Fox would bring out the true value for News Corp.

Independent Franchise Partners was one of the shareholders that felt the merger wouldn’t have realized News Corp’s full potential and suggested other options such as breaking up News Corp. The London-based firm is the largest shareholder in News Corp and Fox, but not Murdoch.

Irenic Capital Management was another shareholder who opposed the proposed merger. It claimed Fox did not serve News Corp’s strategic goals. Independent Franchise and Irenic both believe News Corp shares have a low value. Fox Class A shares closed Tuesday at $32.67, while News Corp’s Class B shares closed Tuesday at $19.53.

–CNBC’s Gabrielle Fonrouge contributed to this article.