The News Corporation (ASX: NWS) share price is up 0.5% after announcing how the Murdochs have settled the family dispute.
News Corp is the company that owns a number of media businesses including Dow Jones, The Wall Street Journal, HarperCollins, The Australian, Herald Sun, Daily Telegraph, news.com.au, The Times, The Sun, the New York Post and a large holding of REA Group Ltd (ASX: REA) shares.
Murdoch resolution
The media business made announcements to the ASX regarding “mutual resolution” of legal proceedings between family members about the Murdoch Family Trust and the public offering of News Corp class B shares by some shareholders that are selling.
News Corp announced that the trustee and beneficiaries of the Murdoch Family Trust told the company that new trusts will be established for the benefit of Lachlan Murdoch, Grace Murdoch, Chloe Murdoch, and Prudence MacLeod, Elisabeth Murdoch and James Murdoch (called the ‘departing beneficiaries’). The departing beneficiaries will cease to be beneficiaries in any trust holding News Corp shares.
The company also announced the trusts of the departing beneficiaries and their respective descendants and charities intend to sell 14.2 million News Corp shares, previously held by the Murdoch Family Trust in an underwritten public offering.
The sellers will receive all of the proceeds of the offering – News Corp itself is not selling any shares and won’t receive any of the proceeds of the offering. This offer is “subject to market and other conditions” – there can be no guarantee if or when the offering may be completed.
What this means
In summary, the court battle about control of News Corp has ended with Lachlan Murdoch gaining control – the other siblings are selling their shares.
Time will tell whether this actually changes the operations or direction of the business – Lachlan was already the chair of News Corp, while the others did not have an active role.
Investors may like that there is certainty about what’s happening.
Thoughts on the News Corporation share price
While I’m not expecting significant earnings growth from the media parts of the business, the earnings growth of REA Group is a strong driver for News Corp and the media business can be an effective way to indirectly invest in REA Group shares.
There are other ASX shares I’d rather buy first, at this stage.
