Murdoch offers $5.86 billion to buy out Fox holders

Monday, Jan. 10, 2005 | 9:03 a.m.

News Corp., the media company controlled by Rupert Murdoch, offered to buy full ownership of Fox Entertainment Group Inc. for $5.86 billion to solidify Murdoch's control over his largest U.S. asset.

News Corp., which owns 82 percent of Fox, plans to offer 1.9 of the company's Class A shares for each Fox Class A share, the company said in a statement today. That values Fox shares at about 7.4 percent more than the closing price Jan. 7, News Corp. said.

Murdoch has spent three months boosting News Corp.'s presence in the U.S. He moved its headquarters to New York from Sydney in November, and the company now is listed in the Standard & Poor's 500 Index. Murdoch said in October he would consider buying full ownership of Fox, which produces about 75 percent of News Corp.'s revenue. Los Angeles-based Fox's assets include the Fox News Channel and 20th Century Fox film studio.

"It's a cleaner investment scenario for investors, a little easier to understand," said David Joyce, a JB Hanauer & Co. analyst in Hallandale, Fla. He rates both stocks "market perform" and said he doesn't own either. "It takes a layer of complexity away."

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