The special committees that the two companies have set up to assess the possible combination have been dissolved. The move came after several shareholders opposed the deal.
A Murdoch trust owns around 40% of the voting shares in the two companies, which shared a governance structure until a scandal over Murdoch’s London tabloid reporters hacking voicemails from public figures prompted the family to separate them a decade ago, fearing that government investigations and civil lawsuits could threaten their entire empire.
But the companies have a structure that gives some shareholders — particularly the Murdochs — far more voting power than others, and since the fall they had been considering a meeting at Rupert Murdoch’s request.
Still, any deal would have required majority approval from other investors in the companies with supervisory shares. And dissent was lurking even within the Murdoch family: Youngest son James, who quit his leadership role in the family business but remains a beneficiary of the family trust, opposed a merger and wrote letters to both boards in the fall, raising questions about the deal — a move first reported by The New York Times.
Merger talks have also been complicated by an expression of interest from an outside company to acquire News Corp’s $3 billion stake. in the digital real estate company Move, according to a person familiar with the discussions. Jim Kennedy, a spokesman for News Corp., declined to comment.
At the time of the 2013 split, the elder Murdoch promised it would “allow each company and its division to recognize their full potential – and unlock even more long-term shareholder value.” As recently as 2019, Lachlan Murdoch told Fox investors the family had no plans to combine the businesses. But his father raised the possibility last fall with his eldest son and various advisers, according to people who spoke to him and who spoke to The Washington Post on condition of anonymity to discuss private conversations.
In November, Irenic Capital Management, an activist investor, sent a letter to the News Corp special committee. opposing the merger. T. Rowe Price, a major shareholder of News Corp., told The New York Times that the proposed recombination would drive down the value of the company, which was already trading below value.
On Tuesday evening, Irenic said he reviewed a letter from senior Murdoch informing them of the withdrawal of the proposed suit. Adam Katz, co-founder of Irenic said he was “encouraged” by the move.