News Corp cuts Australian ties as investors OK US move
LONDON - Rupert Murdoch won approval from an overwhelming number of investors to move News Corporation's corporate headquarters to the US as it said TV advertising Stateside was up by less than expected.
Almost 90% of investors backed the move of the $48bn News Corp to the US, where the company earns 75% of its revenues. The 73-year-old media baron Murdoch has argued the move will attract institutional investors and increase its access to US capital markets.
However, the move had been questioned by some smaller investors, who doubt the merits of the move. News Corp has defended it by saying that it would reward shareholders, who will see shares rise.
There was an immediate response to that promise, with News Corp shares rising more than 4% on the back of Murdoch telling investors that the media giant was on track to meet its earnings forecast
"With our first quarter already behind us, those estimates remain achievable," Murdoch said.
The move to New York ends News Corp's corporate history in Australia, where the company was founded on the back of a newspaper business in Adelaide.
Murdoch himself became a US citizen in 1970 and has lived there ever since. However, despite severing links down under, Murdoch said that the company would continue to define itself by certain Australian characteristics.
"News Corporation will always be defined by an Australian spirit, and for entirely selfish reasons as it is from Australia this company derives its entrepreneurial spirit, our energy, our brashness," Murdoch said.
News Corp said that its TV advertising was ahead less than expected, but that other parts of the business were doing well, with strong performances expected from the Star TV network in Asia and profits at Sky Italia.
"Our advertising on television so far this year is up by less than what we expected. On the other hand, other areas of the company are doing much better than we expected," Murdoch said.
Murdoch added that he expected DirecTV to break even next year.
News Corp is due to report its first-quarter results on November 4.
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