Rumors have swirled over Fox and News Corp. possibly merging into one entity, but Irenic Capital, which owns about 2% of News Corp., has taken issue with its potential merger.
A merger would produce a more complicated company and turn off investors rather than increase the company’s lagging stock price, Irenic Capital stated in a letter to the News Corp. board.
“And even if such synergies do exist today, they would principally benefit Fox and reside in the News Media segment of News Corp,” Irenic Capital said (h/t Deadline). “For example, Fox Business may benefit from greater integration with The Wall Street Journal and some of Dow Jones’ other properties, but it is highly debatable whether the benefits from such an association flow both ways.
“Combining News Corp with Fox will result in a combined company that is obviously more complex than both companies left separate.”
Irenic believes a unification would aid Fox far better than News Corp. and cautioned that the board has a fiduciary responsibility to investigate all possible routes to develop value beyond the one suggested by its primary shareholder.
Eduardo Razo is the Assistant Content Editor for BNM, which includes writing daily news stories on the news media industry. He can be found on Twitter @eddierazo_ or you can reach him by email at eddie1991razo@gmail.com.
