News Corp. plans to reincorporate in U.S.

Murdoch company shifting its main listing to NYSE

April 07, 2004|By NEW YORK TIMES NEWS SERVICE

News Corp., Rupert Murdoch's mammoth global media company, said yesterday that it intends to reincorporate in the United States from Australia, where it has been domiciled since 1949, when Sir Keith Murdoch, Murdoch's father, began to buy up interests in Australian newspapers.

The company said it will shift its primary listing to the New York Stock Exchange while retaining secondary listings in Australia and on the London Stock Exchange.

Two classes of News Corp. stock are traded in the United States, but as American depository receipts (ADRs). Many institutions and pension funds are precluded from owning such shares.

Fox Entertainment Group, the company's U.S. subsidiary, has traded as a free-standing entity since 1998.

The relocation is subject to shareholder approval. News Corp. said it expects the shift to take place by the end of the year.

News Corp. said the reorganization will be accomplished under an Australian law that allows holders of ordinary and preferred shares, including the ADRs traded in the United States, to exchange their voting and nonvoting common stock in a new Delaware corporation that will become the new parent company.

The new shares will have "essentially" the same rights as the company's existing ordinary and preferred shares, News Corp. said. The exchange of shares is expected to be tax-free for the "vast majority" of News Corp. shareholders, the company said.

In many respects, News Corp.'s move will bring the company up to date with its position in the United States.

Murdoch, 73, moved to the United States in the 1970s and became an American citizen in 1985.

More than 75 percent of News Corp.'s revenue and profit is generated in the United States. Still, the company has retained its links with its Australian heritage, holding annual general meetings in Adelaide, the capital of South Australia, the state where News Corp. has its registered office.

Until yesterday, there was a price difference of about 12 percent between News Corp.'s voting NWS shares and the nonvoting NWS/A shares. The spread has narrowed in recent weeks after rising to as much as 22 percent.

The gap narrowed further yesterday on the New York Stock Exchange. Shares of the voting stock rose 55 cents yesterday to close at $37.43. The nonvoting shares, which are more frequently traded, rose $2.14, or 6.5 percent, to $35.03.

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