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It’s official. The newspaper and publishing assets of News Corp must get by without the help of well-heeled entertainment and cable assets, following a Tuesday vote by investors.
The vote gave formal approval to a long awaited plan to split News Corp into two companies on June 28th: an entertainment concern called 21st Century Fox and a new News Corp that will house the book publisher Harper Collins, Dow Jones and Australian newspaper and TV assets.
“News Corporation’s size and complexity made it difficult for investors to understand and properly value our company,” said News Corp Chairman Rupert Murdoch said at the meeting, according to Bloomberg. “We’re confident the separation will unlock the true value of our assets.”
The split was announced last year after a hacking scandal gave further impetus to long-running shareholder complaints that Rupert Murdoch, and his fixation with newspapers, was a drag on the overall company. Analysts referred to the “Rupert discount” when assessing the stock.
The reborn News Corp will start life with solid footing: it will have a healthy cash reserve, no debt and protection from raiders. Its ultimate fate, however, appears to turn on Dow Jones’ CEO Lex Fenwick’s plans to turn the unit into a Bloomberg-like profit machine.